Manila: President Benigno Aquino and his countrymen were elated that Philippine economy grew at 6.6 per cent for the whole year of 2012, following a 6.8 per cent gross development product (GDP) on the fourth and final quarter ending December 2012, making it second to China as the fastest growing Asian nations in 2012.
“All of us will be impressed,” Aquino said earlier before National Statistical Coordination Board (NSCB Secretary General Jose Ramon Albert made a proud announcement on Thursday.
“This will inspire all of us to work harder. I hope there will be stronger sources of growth like industrialization and more development projects in the Philippines,” said Jeanette Rillo, an office worker in Makati City, the financial district.
Noting areas of robust growth, NSCB’s Albert mentioned “services sector led by trade, and real estate, renting and business activities, accentuated by the sturdy performances of manufacturing and construction”.
Other sources mentioned higher domestic demand (resulting in 70 per cent consumer led economy) funded by money of 10 million overseas Filipino workers (whose remittances grew at 6.1 per cent); higher government spending (in infrastructure at 12 per cent); and higher inclusive growth from tax payments due to tax reforms that began during the time of former President Gloria Arroyo, and continued by legislation of six taxes for tobacco and alcohol this year.
Aquino’s drive against corruption has increased confidence and optimism, and this resulted in more investments.
The 2012 overall 6.6 per cent GDP exceeded various expectations, earlier placed by the government’s National Economic Development Authority (NEDA) at 6.5 per cent; International Monetary Fund, 6.5%; Reuters, 6.4%; Bloomberg, 6.3 %; and World Bank, 6%.
It was almost 50 per cent increase from the overall 3.9% GDP in 2011.
The growth rate will make Philippines Central Bank continue its policy to keep low interest rate at 3.5 per cent throughout 2013, analysts predicted, adding the robust growth can further strengthen the Philippine stock market, up 0.8 per cent also on Wednesday.
It could bolster the Philippine peso, quoted at 40.655 per dollar on Wednesday. However, this could affect export industry, outsourcing offices, and the value of OFWs’ money whose relatives’ expenditures fuel domestic consumption, a major source of GDP, estimated at 70 per cent.
Mentioning things to be done to strengthen Philippine growth, various sources identified infrastructure spending, investments from the public and private sectors, industrialization, and higher inclusive growth through better tax collection and government revenues.
“It is our immediate task to put in place policies and implement programs that will sustain our economy’s growth over the medium term,” said Arsenio Balisacan, head of economic planning.
Looking forward, Philippine economists predicted 6 to 7 per cent GDP in 2013; IMF, 6 per cent in 2013, and 5.5 per cent in 2014; Reuters, 5.6 per cent.