Economy headed for 7% GDP growth

Spectators become excited during the inaugural switch-on of lights decorating a giant Christmas tree at Araneta Center in Cubao, Quezon City in mid-November 2012. Christmas buying spree, along with increased investments and public and private spending, is seen to drive growth in the last three months so that the economy could grow 6.7 to 6.8 percent in terms of GDP this year, according to Trade Undersecretary Cristino Panlilio. AUGUST DELA CRUZ/CONTRIBUTOR

The Philippine economy could expand at just below the minimum yearly average needed to curb poverty as it builds momentum for future years, according to trade leaders.

Trade Undersecretary Cristino Panlilio said in an interview that the economy could grow 6.7 to 6.8 percent in terms of gross domestic product (GDP) this year. That would make the Philippines the second or third in Asia, with China expected to top, he said.

“We did 6.5-percent (GDP growth) as of September. So if we do 6.7, 6.8 percent (in the fourth quarter), we should average at 6.7,” Panlilio said.

“Increased investments as well as public and private spending are seen to drive growth. Normally the last three months are big months because of the Christmas buying spree,” Panlilio said.

As of October, trade officials have entertained 25 investment missions composed of several firms each. “I am sure we will end the year with something like 32 in-bound missions,” Panlilio said.

On exports, Panlilio said electronics was “flat out” but non-electronic merchandise could pull up exports such that it could break the all-time high of $51.4 billion hit in 2010 because of agricultural products.

Government and consumer spending would more likely boost the economy but exports might not perform as strongly as the strong peso tended to benefit heavy importers yet weakened exporters’ revenue, said Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis and Federation of Philippine Industries chairman Jesus Lim Arranza.

The impact of typhoon “Pablo” on this year’s agricultural output was seen to be “minimal” and might be more felt early next year but the restoration efforts in affected areas in Mindanao could even help boost GDP through public spending, Agriculture Secretary Proceso Alcala said in a phone interview.

The inter-agency Development Budget Coordination Committee (DBCC) has lowered its target for exports growth to 8 percent (from the original 10 percent) and imports to 7 percent (from 12 percent).

The Philippines beat expectations in the third quarter with its 7.1-percent GDP growth, ahead of other economies within Asean. China registered a 7.7-percent GDP growth in the same period.

The third-quarter performance of the Philippines was way above the market’s media forecast of 5.4 percent, Economic Planning Secretary Arsenio Balisacan said, adding that full-year growth would likely beat the target of 5 to 6 percent and move toward the previously “aspirational” 7- to 8-percent range needed every year to spur employment and curb poverty. The country’s top economist said this was expected to translate to more jobs and better incomes for Filipinos.