PH growth continues in Q4, says FMIC and UA&P

GDP to expand by an estimated 6.5%, one of fastest in region

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The Philippines is expected to remain one of the fastest growing Asian economies in the fourth quarter, with its gross domestic product (GDP) estimated to expand by at least 6.5 percent during the period from a year ago.

This was according to the latest issue of “Market Call,” a joint publication of First Metro Investment Corp. and University of Asia and the Pacific, which said significant infrastructure spending in the last three months of the year would likely keep the Philippines’ growth rate robust.

“GDP growth for the fourth quarter should be at least as good as the average of 6.5 percent in the first three quarters since infrastructure spending is going full blast,” the report said.

The comment was made following pronouncements from the budget department that government spending, especially on infrastructure, was targeted to substantially increase in the latter part of the year to compensate for the lower-than-programmed expenditure in the earlier months.

In the third quarter, the Philippines grew by a surprising 7.1 percent from a year ago, thus becoming the fastest growing economy in Southeast Asia for the period.

This brought the country’s average growth rate for the first three quarters to 6.5 percent, one of the fastest so far this year in Asia.

The country’s growth performance was attributed to the year-on-year increase in government spending (which was, however, lower compared with what has been targeted), higher household consumption on the back of rising remittances and rise in investments by local firms.

Economists said the Philippines in the first three quarters landed on an economic “sweet spot,” as its high economic growth came with a modest inflation rate.

The Market Call said the favorable combination of high growth and low inflation would likely be sustained in the fourth quarter.

Inflation averaged at 3.2 percent in the first three quarters. For the first 11 months, the latest report of the National Statistics Office on consumer prices showed that inflation averaged at 3.2 percent.

“We see inflation to average 3.2 percent this year,” The Market Call said.

This average is at the low end of the government’s official inflation target of 3 to 5 percent for this year.

The combination of high growth rate and low inflation makes the Philippines worthy of recognition at a time when the global economy remains weak, economists said.

They also said, however, that the Philippines remains challenged with a significant poverty incidence, which reflects the failure so far of economic growth to improve the financial conditions of the poor.

They said investments must be channeled to sectors that will employ people belonging to poor households.

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  • FORTHE GOOD

    Iba talaga kapag hindi corrupt ang presidente. Mas malaki ang tiwala ng mga negosyante at mga mamamayan. Mas malayo ang nararating ng limitadong pondo ng gobyerno para sa mas maraming projects.

    God speed President Aquino, the incorruptible president.

    God bless the Philippines.

  • Your_King

    Let’s be honest, the Philippine economy was already on the verge and actually was already growing before Aquino got into office. It just so happens, he caught the Philippines at the right time when he became the President.

    • seraq

      that is not being honest

    • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

      i agree it was already growing, but because of this present administration, we grew faster and coupled with a good governance platform, we are once again in the radar of foreign investors unlike in previous decade were we are famous for corruption. the growth is more sustainable and we are heading for a 3rd year of high growth.

      Maybe you are referring to Erap’s days which I agree the economy grew because he came in at a right time when we are still recovering from the Asian crisis, but, unfortunately, he screw things up.. and the economy slowed down significantly.

      • Paliwaweng

        you are right Cris, the uptrend during Erap was due to the reforms being initiated by the Ramos administration when we have a growth for the first time in more than 20 years.
        And yes, unfortunately, when came, he turned most of our government and private  corporations like the SSS and GSIS  his piggy bank and new lkleptocracy began.
        This time around, fortunately with the  new government’s sincerity in uprooting corruption, things began to be rrosy as they are.

      • Your_King

        Your post is very inaccurate and it is sad that many people are misinformed.

        Your quote: “we are once again in the radar of foreign investors unlike in previous decade…”

        Fyi, do you know of TeleTech and other companies involved in BPO/IT?? These major companies invested A LOT in the Philippines the last decade.

        I don’t know how else to say it but you are clearly wrong and misinformed.

      • http://pulse.yahoo.com/_JEMNLLYAP5EA7SM3A6QUOGV62Q Chris

        “Fyi, do you know of TeleTech and other companies involved in BPO/IT?? These major companies invested A LOT in the Philippines the last decade.” – and you call that a trend? they may have invested but can you measure A LOT in terms of FDI? yes it may have started with your favorite president but it only took off in the latter part of her term and was further boosted in the present admin. 

        BUT have you heard of any foreign reports covering PH “investment climate” in the last decade compared today? Nil. We are on a sweet spot and they have been talking about us since last year. Foreign Investor perception is the key to higher FDIs, etc.. 

        Yes, the previous admin has implemented reforms e.g. VAT, income tax, etc.. But this admin has already implemented several reforms in just 2 years.

      • Your_King

        An economy doesn’t just pick-up overnight or even just 2 years. We may all not want to admit it but the previous Administration laid a great foundation and planted amazing seeds and this Administration is seeing the fruits of their labor now. To claim that Aquino did all this in 2 years is inaccurate.

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