Neda keeps growth target for 2013

The Philippine economy remains on track to grow by at least 7 percent this year despite the dampening effects of the earthquake that badly hit Cebu and Bohol.

This was according to the National Economic and Development Authority (Neda), which estimated that losses from the earthquake would drag growth in the country’s gross domestic product (GDP) for this year by half of a percentage point, at the most.

“The estimated impact is minimal,” Neda Director General Arsenio Balisacan told reporters Monday on the sidelines of a Senate hearing on the proposed budget for 2014.

Balisacan said the estimate took into account lost potential tourism income as well as disruption of business activities due to infrastructure damage.

Balisacan said the drag on GDP growth was only good for this year.

He said next year, spending for reconstruction could boost growth in GDP, or the value of all goods and services produced within Philippine borders.

The Philippines, together with China, became the fastest growing economy in Asia in the first semester of this year after registering an expansion rate of 7.6 percent.

This prompted government economic officials to project that growth rate for the full year would be at least 7 percent, better than the official target.

The government has set its economic growth target for this year at a range of 6 to 7 percent.

However, the recent earthquake, with a magnitude of  7.2, gave rise to concerns that growth rate in the second half would notably slow down.

But Balisacan said Neda’s assessment last week showed that the impact on GDP growth would not be significant.

The robust pace of economic growth in the first half was credited for helping the country secure investment grades this year from all major international credit rating agencies.

Fitch Ratings gave the Philippines an investment grade in March followed by Standard & Poor’s and Moody’s Investors Service in May and October.