GDP on track to meet 6-7% target

Economic Planning Secretary Arsenio Balisacan INQUIRER FILE PHOTO

The Philippine economy’s first-quarter performance was likely “on track” to hitting the government’s 6- to 7-percent growth target for the year, Economic Planning Secretary Arsenio M. Balisacan said on the sidelines of the 34th National Conference of Employers.

Balisacan, who is also director-general of the National Economic and Development Authority (Neda), said a stronger currency in the first quarter dampened exports in terms of peso value. The local currency followed an upward trend in the first quarter following four previous quarters of gains. Soft demand due to a weak global economy did not help matters for exporters.

There may yet be a recovery for the rest of the year in terms of outbound shipments, Balisacan said. “For exports, we hope to catch up.”

On the plus side, domestic consumption was “quite robust” and investor confidence remained strong. Government spending was also expected to have helped sustain the momentum from last year’s economic expansion.

Election-related activities given the recent midterm polls for legislators and local officials had little impact, if any, on economic expansion, Balisacan said.

Analysts have forecast that the Philippine economy grew around 6 percent in the first quarter.

The government will release the official figures on economic growth for the first quarter on May 30, 2013.

The country’s gross domestic product (GDP), a measure of the economy, rose 6.3 percent in the first quarter of 2012. In the fourth quarter, GDP expanded by 6.8 percent, bringing full-year growth to 6.6 percent, beyond the government target of 5 to 6 percent.

This year, the Philippines aims to grow its domestic economy by 6 to 7 percent.

Exports and imports both slipped in the first quarter this year. For the first three months of 2013, merchandise exports were down

6.2 percent to $12.1 billion from $12.9 billion in the same period in 2012. Imports fell 7.4 percent year-on-year to $14.36 billion, according to National Statistics Office data.

Balisacan said moderate gains in imports of capital goods showed businesses were continuing their expansion plans in the first quarter of 2013. However, in terms of export prospects, economist Cid L. Terosa of the University of Asia and the Pacific said the overall contraction in imports “reflect slow factory and export growth” due primarily to external factors such as the weak economies of the Philippines’ major trading partners.