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Surprising 7.1% growth

PH economy best performer in Southeast Asia

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CRANES OVER MAKATI CITY A property boom in Metro Manila, described as the best in two decades, has pushed construction to its highest growth in at least six quarters, jumping 24.3 percent in the third quarter from a year earlier. EDWIN BACASMAS

The Philippine economy grew 7.1 percent in the third quarter year-on-year, exceeding expectations and making it the best performer in Southeast Asia.

The country’s economic growth was the strongest in Asia during the period after China’s.

“We are well on our way to surpassing our growth target of 5 to 6 percent this year,” Socioeconomic Planning Secretary

Arsenio Balisacan told reporters on Wednesday.

Balisacan said the high growth of the gross domestic product (GDP), the value of goods produced and services rendered in a given period, was expected to translate to more jobs and better incomes for Filipinos.

A jump in third-quarter farm output and a late rebound in exports also contributed to the economy’s 1.3-percent growth rate in the July-September quarter from April-June, which was three times as fast as economists had predicted.

Robust domestic consumption and higher government spending have helped cushion the economy from the worst of the global slowdown, while manageable inflation has allowed authorities to keep interest rates conducive to growth.

The country is the only economy in the world which the International Monetary Fund (IMF) believes will grow faster than earlier expected this year.

Earlier this month, the IMF raised its 2012 growth outlook for the Philippines to more than 5 percent from its October forecast of 4.8 percent, citing its sound fiscal and monetary policies.

‘Diamond’ of region

“The Philippines is the diamond of the region this year,” said Enrico Tanuwidjaja, economist for Southeast Asia at RBS in Singapore.

Indonesia was the second-best performer in Asean with 6.2 percent growth, followed by Malaysia (5.2 percent), Vietnam (4.7 percent), Thailand

(3 percent) and Singapore (0.3 percent). China posted a 7.7-percent GDP growth.

Balisacan said the third-quarter performance of the Philippine economy was way above the market’s media forecast of 5.4 percent.

The growth momentum is expected to continue next year as government works to ease the cost of doing business and as more infrastructure projects under the private-public partnership scheme get underway, he said.

Record infra budget

The government has set a record infrastructure budget of over P400 billion next year as it pursues major upgrades of roads, ports, bridges and airports to speed up growth and boost private investment.

Balisacan said these along with finance department’s tapping of the country’s record foreign reserves to pay its foreign debts would ease the upward pressures on the peso next year.

The peso is Asia’s best performing currency so far this year, up more than 7 percent against the US dollar on strong foreign inflows into Philippine stocks and bonds, fueled by forecasts of sustained and resilient domestic growth.

Year-to-date growth is already at 6.5 percent with services and industry (except mining) still driving growth.

Officials said the full-year growth would likely beat the target of 5 to 6 percent and move toward the previously “aspirational” 7-8 percent needed per year to spur employment and curb poverty.

A strong BPO sector, booming construction, increased consumer and government spending, and external trade contributed to the highest quarterly growth since 2010, said

Jose Ramon G. Albert, secretary general of the National Statistical Coordination Board.

Property boom

Among industries, construction posted its highest growth in at least six quarters, jumping 24.3 percent from a year earlier as Metro Manila enjoys the best property boom in two decades. (See table below.)

Public consumption expanded an annual 12 percent in the third quarter, almost double the rate in the second quarter.

Relatively stable prices, steady inflow of remittances, and rebounding exports supported growth, according to the National Economic and Development Authority (Neda).

While export receipts of semiconductors and electronic data processing equipment contracted, both items contributed recently to increased imports, which may mean that manufacturers have been “stocking up” on intermediate inputs in anticipation of recovery in the global demand for electronic products, Neda said.

Agriculture also fared better in the third quarter than in the four previous quarters with increased rice and corn outputs as part of efforts to achieve food self-sufficiency. The weak fishery sector is a concern, however, Balisacan said.

Good governance

In a briefing, presidential spokesperson Edwin Lacierda attributed the high growth rate to “sustained confidence in the leadership of President Aquino and his administration, which has consistently equated good governance with good economics.”

Mr. Aquino, who was elected in 2010, has instituted anticorruption reforms while seeking to boost revenues and improve government spending.

“The Philippine economy has shown both resilience and resurgence despite the global economic slowdown,” Lacierda said.

Finance Secretary Cesar Purisima said confidence in the way the government was being run had encouraged more people to do business in the country.

“The growth rate shows that the economics of good governance, or ‘Aquinomics’ works,” Purisima said in a statement.

The Makati Business Club (MBC) lauded the strong third-quarter performance.

“Good governance is paying off. President Aquino and his economic team must be lauded,” MBC executive director Peter Perfecto said via text message.

Trade Secretary Gregory Domingo said in a phone interview that he was “not surprised” by the 7.1-percent growth for the third quarter because the country was coming from a low growth base.

In the third quarter of 2011, the economy turned sluggish as exporters and other contributors to the economy felt the impact of the triple tragedy in Japan and the flooding in Thailand earlier that year.

“Nevertheless, it is good to post this level of growth for the third quarter. We will continue to help our business people with shared facilities, simplifying and shortening the process of starting a business, and educate entrepreneurs as well as students on how to take advantage of free-trade agreements.

Budget Secretary Florencio Abad said the latest indicators showed that the country faced “very fruitful times ahead” with low inflation and interest rates and increased confidence in government reforms.

Christmas, poll spending

Abad said growth was likely to stay robust in the fourth quarter.

“Public consumption will most definitely stay robust, fueled by high consumption levels during the holidays, continuing investments in public and private infrastructure, and the kick-start of election-related spending this Christmas season,” Abad said in a separate statement.

Abad said this would improve the country’s credit rating further. Both Moody’s and Standard & Poor’s raised the Philippines’ credit ratings to within one rung of investment grade in recent months.

However, Balisacan said there were still external threats such as the “looming fiscal cliff” in the United States and the long-running eurozone crisis.

He also said the government was closely watching the strengthening peso, which could hurt exporters’ competitiveness. With reports from Michael Lim Ubac, Michelle Remo, AFP

Third quarter 2012 growth by industry

Industry/ Group               Growth rate (in percent)

Agriculture                                          5.5

Fishing                                                  -0.6

Industry sector                                 8.1

a. Mining & quarrying                     -2.2

b. Manufacturing                             5.7

c. Construction                                  24.3

d. Electricity,gas and water supply            2.7

Service sector                                    7

a. Transportation, storage and

communication                                 9

b. Trade and repair of motor

vehicles, motorcycles,

personal and household goods 7

c. Financial intermediation           8.3

d. Real estate, renting

& business activity                           7.8

e. Public administration

& defense; compulsory

social security                                    4.3

f. Other services                               5.3

Originally posted at 11:14 am | Wednesday, Nov. 28, 2012


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  • Nagagalitna

    God Bless the Philippines!

  • Kamatis Tomato

    Imagine student government pa lang ang nagpapatakbo ganito na, ano na lang kaya kung may PhD in economics? 

    • Ceazar

      Dahan dahan lang, pareng Kamatis. Si Gloria ay may Masters in Economics from ADMU and a PhD also in Economics from UP. Look where she took the country.

    • http://profile.yahoo.com/GDTRJBMQJUPLM6Z6AAYXTIUYOQ Namoga

      Ulul!  PhD mo mukha mo ugok!  Wala sa titulo de odats yan.  Meh PhD ka nga, demonyo ka naman.  Wala rin.

      Palibhasa utak papel ka, dinadaan sa diploma ang “katalinuhan”, para kang si Amalayer inamoka.

      Hindi ako pro-Noynoy pero para sakin yung mga taong ginagawang sukatan ng pagkatao ang academic attainment ay wala sa matinong mentalidad at moralidad. Si GMA meh PhD, tingnan mo andaming kaso.  Si Lula da Silva naman, Grade 5 lang tinapos pero napaunlad ng husto Brazil.  Digs mo kumag!?

      Wala sa diploma de kulafu yan, nasa katinuan ng pagtatrabaho yan.  Saksak mo yan sa kokorte de kamatis mo ha.

      • Kamatis Tomato

        Haha cool ka lang, I’m a Noynoy fan since time of adam. You read between the lines, you missed the message by a mile. Sayang ang gamot sa high blood. Know who are on your side. 

      • http://profile.yahoo.com/GDTRJBMQJUPLM6Z6AAYXTIUYOQ Namoga

        Still, your student-vs-PhD post is non sequitur. 

        I can exclaim with full conviction right now that making Noynoy attain some masters of doctorate degree is neither gonna make him evil nor good.  Seriosuly.  Again, let’s go back to Lula da Silva’s example.

        Who’s on my side?  I don’t know and I don’t care because I do not take sides.  I harshly criticise Noynoy for his K+12 programme, but highly praise him on what he does with the Philippine economy.  I give credit when credit is due, and I criticise the downright unacceptable.

        I mean, c’mon.  In today’s times polarised between dropout billionaires changing the world, and arrogant pedants insulting common folks in the name of academic attainment, expect hostile reactions when pedant posts are made online.

  • ApoNiLolo

    If this administration’s performance is consistent until the end of PNoy’s term, I think, there is a possibility that they will open again the debate regarding changing to a parliamentary form of government. If that happens, with PNoy’s popularity, he might become its first prime minister.

    • http://www.facebook.com/degiepaulogalura Degie Paulo Galura

      agree.. i was thinking, baka may plano din si PNoy na i.revised ang constitution at gawing parliamentary before he steps down to his position para sya ang gagawing Prime Minister sa pinas

    • Guest

       No problem with prime minister model. That works better than the presidential.

    • regd

      It doesn’t matter what form of government. I wish for him to continue. And WE ARE STILL THE BOSS!

      • ApoNiLolo

        In its present form, he can’t lead again after his term expire. But in a parliamentary form, he can as prime minister. : )

  • welee1

    I have this in mind that Q3 would pull a surprise and it did. Bravo!!!! Expect more good news from here on. Rise Philippines it’s your time.

  • Kamatis Tomato

    Tiglao and Doro are preparing their columns which either refute or attribute it to who else?

    • joshmale2004

      I bet they will.

    • sam_aquino

       2 fathers of all CRABS…

      cheers, bro, : )

    • Guest

       Well, that’s the price of democracy, to tolerate crabs.

      • Kamatis Tomato

        The economy will grow higher and Abalos doesn’t have to worry about source of fry if he will shift to crab fattening sa dami ng crabs. 

      • Guest

         Pls keep out Abalos from this.

    • OFW28

      Hahaha! oo nga sigurado yan bukas or friday meron na si Tiglao pangontra, hayaan mo lang para magkasakit sa puso hahaha!!

  • virgoyap

    Stronger economy makes a stronger peso and the OFWs will cry foul!!!

    • http://pulse.yahoo.com/_ITHRKJWK3EGO2FR7BJSGPKJWF4 emmanuel

      i am an OFW and i will not cry foul. i am happy when the Philippine economy improves as it would mean better life for the millions of Filipinos.

      • Ceazar

        Like, like, like, like, like, like, like, like, like, like.
        That makes ten likes for your comment.

        I wish there were more Filipinos like you who are not so self-centered.

    • http://twitter.com/alfs_alfs Pons Corpuz

      Dude, that’s the way it is. Its the law of supply and demand. Ano gusto mo, bagsak ang peso and bagsak ang economy or mataas ang peso and pataas na economy? choose your poison. 

      • virgoyap

         Pons I’m very happy about the news, but I am just relating what I’ve heard from many OFWs.

      • http://twitter.com/alfs_alfs Pons Corpuz

        yeah, I understand. 

      • OFW28

        masaya kami para sa bansa, ung binababa ng pinapadala namin extra hour lang ang katapat nyan, kung dati dito sa SG 1:33.60 ngayon eh 1:33.30 pasok ka lang ng 1 or 2 oras na OT bawi na yan.

      • virgoyap

        There you are!!

    • willbillywilly

      CHOOSE BETWEEN THE TWO:

      10 million ofw are happy if the dollar appreciates

      compared to

      85 million happy filipinos if the peso appreciates

      By the way im base abroad but i still look forward to going back to my homeland

    • http://pulse.yahoo.com/_AR3F3RNQX4U3PKBI526NJI6BYM Jose

      Not, if the response so far is a gauge. I myself will not.

  • galit_sa_oligarko

    death penalty naman sa mga economic saboteurs saka sa mga heinous crimes. Lalong lalo na sa mga corrupt na gov’t officials na cause ng totoong paghihirap ng mga Pilipino.Kung gusto nyong mag linkod sa bayan umayos kayo.

  • joshmale2004

    AQUINOMICS!!!!!! I LIKE THIS NEW WORD TO DEFINE PHILIPPINE ECONOMICS.

    • Iggy Ramirez

      I like it too. I thought it just came out recently with all this revelry of economic positivity.

      However, credit should go to whomever credit is due and based on my research, Inquirer writer Cielito Habito came up with this word when he was asked to talk about the effects of Aquino’s governance on economic policies. His piece was titled “Aquinomics: What difference has it made?” and was published on June 2011, about more than a year ago.

      • joshmale2004

        Thanks for the information Bro. I missed that write up. I’ll search for it. I’m sure it will be worth reading.

    • angtangamo

      I just read the report of RBS & HSBC about our Q3 growth. And they attribute
      this to “strong remittances (from OFW’s) that is driving strong domestic
      consumption”. So this is not really “Aquinomics” as you put it.

      • joshmale2004

        National Statistical Coordination Board Secretary-General Jose Ramon G. Albert said, “Increased consumer and government spending, increased investments in construction, and the third consecutive quarter of growth in external trade contributed to the highest quarterly growth since the third quarter of 2010.

      • angtangamo

        What he doesn’t tell you is how that increase is distributed. 70% of the 7.1% increase is because of strong domestic consumption backed by ofw remittances. You cannot attribute that to “Aquinomics”. The remaining 30% or 2.1% is “Aquinomics”. LOL.

  • GOPHILIPPINESGO

    Aquinomics at work!

    Noynoying at its best!

    Mabuhay!!

  • GaggerAlert

    Cheers to all the citizens of the Philippines. Its the society who made this happen. One single man wouldn’t be able to do this alone. :) Yes, I’m speaking of that non-corruptible specimen in Malacanang.

    • GaggerAlert

      Well, good thing people here understands that its a group effort. So Mr. President, could you please stop the credit grabbing, and for once give us the credit regarding the economy’s progress. We’re the ones doing the brunt of the work you know, unlike you who only signs laws after giving much thought (I have reservations).

      So sa SONA, pakisabi namn na. “Salamat sa inyo, mamayang Pilipino”. Instead of “ako ako ako”, “gobyerno ko”, anything narcistic.



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