Neda sees slower Q1 GDP growth

MANILA, Philippines—Economic Planning Secretary Cayetano Paderanga Jr. said the economy might have experienced tempered growth in the first three months compared with the boom in early 2010.

In terms of gross domestic product (GDP), the economy was estimated to have grown 4.8 to 5.8 percent in the first quarter from the same period in 2010, Paderanga said. Citing rough estimates from the National Economic and Development Authority staff based on 1985 prices, he said agriculture and services were key contributors to the growth.

Paderanga, who is also director general of Neda, said that the 7.3-percent GDP growth in early 2010 benefited from election spending and a low growth base from 2009. The GDP growth in the first quarter of 2009 was just 0.5 percent.

An updated estimate using 2000 prices has yet to be released by the National Statistical Coordination Board (NSCB). The official GDP figures for the first quarter are to be released on May 30.

Paderanga said that economic activity for the first quarter has “normalized” from the spending frenzy prior to the May 2010 national elections but said he hoped the growth momentum in the last quarter of 2010 and early 2011 would continue.

Despite an expected slower growth in the first three months, the government is keeping its full-year growth target of 7 to 8 percent for 2011 and next four years.

Paderanga said the Development Budget Coordination Committee (DBCC) has reviewed the yearly targets “and decided to keep them.” The DBCC might review the target after the end of the second quarter, Paderanga said.

He noted that the yearly target might be easier to reach in 2012 onward since the effect of election spending and a high growth base in 2010 might have been diffused by then.

Earlier, the Inquirer asked economists how they thought the economy had performed in the first three months of 2011. Their forecasts averaged 5 percent.

Benjamin Diokno, former budget secretary and an economics professor at the University of the Philippines, forecast a GDP growth of “between 4.5 and 4.9 percent.” Cid Terosa, University of Asia and the Pacific (UA&P) economist, predicted 4.5 to 5 percent. Rolando Dy, executive director of the UA&P’s Center for Food and Agribusiness, said that a 5- to 6-percent growth was “reasonable” as agriculture posted 4.1-percent output growth in the first quarter. At that rate, Dy said agriculture might have contributed about one percentage point to the first-quarter GDP growth rate.