MANILA, Philippines - The domestic economy may grow at around 6.5% this year, breaching government's target of a 5% to 6% expansion, Economic Planning Secretary Arsenio Balisacan said Tuesday.
"We expect growth for the whole year to be about 6.5%. We'll be happy to have it closer to 7% but it pays to be a little more conservative," Balisacan said during the National Economic and Development Authority's year-end briefing.
The domestic economy grew by a surprising 7.1% in the third quarter, bringing gross domestic product (GDP) growth to 6.5% in the nine months to September.
"The first three quarters already gave us 6.5%. To break that 6% [growth], all you need is for your economy to grow around 4.6% which is very unlikely for the fourth quarter," Balisacan explained.
Data for the fourth quarter and 2012 gross domestic product (GDP) growth will be released by the National Statistical Coordination Board early next year.
"Our recent economic growth is especially remarkable because it is higher than any other ASEAN (Association of Southeast Asian Nations) country," Balisacan said.
"Moreover, this was achieved without sacrificing stability, as inflation has been kept low and fiscal deficit-to-GDP ratio is only at 1.4 percent," he continued.
But Balisacan stressed creating jobs and ensuring these are of good quality remain to be the government's challenge despite the stellar economic growth.
"We will continue our efforts to improve our country’s competitiveness as this will lead to more investments that will create the needed employment in the medium to long term," Balisacan said.
The growth momentum from 2012 is foreseen to be sustained until the next two years as the economy is expected to grow by 6% to 7% in 2013 and by 6.5% to 7.5% in 2014, Balisacan said.
To achieve such, the government will focus on the manufacturing sector driven by the semiconductor and electronics industry; the construction sector; and the services sector which will be buoyed by continuous expansion in the IT-BPO industry.
"We're not aiming for a double-digit growth because I don't think it's sustainable because of the kind of infrastructure we have... because ultimately inflation will catch up with you," Balisacan explained.
"We want growth [that is] sustainable and rapid enough to reduce poverty," he added.