MANILA, Philippines - Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said the country’s economic growth may have accelerated by 7% last year, exceeding the revised growth projection of between 5% and 6%.
Tetangco explained that the strong growth posted in the first three quarters of last year was likely sustained in the fourth quarter.
“We believe that 7% growth for 2010 is attainable given the first to third quarter 2010 actual growth rate and given the likely outcome of the fourth-quarter performance,” he stressed.
The country’s GDP expanded by 7.5% in the first 3 quarters of last year from 0.7% in the same period in 2009. The Cabinet-level Development Budget Coordination Committee (DBCC) revised the country’s GDP growth target to a range of 5% to 6% instead of 2.6% to 3.6% due to the surprising economic recovery.
The Philippines barely escaped recession after its GDP growth slowed to 1.1% in 2009 from 3.8% in 2008 due to the full impact of the global financial crisis. A combination of fiscal and monetary stimulus packages helped cushion the impact of the global economic meltdown on the domestic economy.
Tetangco added that monetary authorities believe that this year’s GDP growth target of 7% to 8% is achievable despite the fragile economic recovery experienced by advanced economies such as the US, Europe, among others.
“We also believe that the 7% to 8% GDP growth target for 2011 is attainable, should consumption remain solid and investment gain further traction with the infrastructure programs of the government,” the BSP chief said.
According to him, the country’s external trade would continue to improve as economies of the major trading partners of the Philippines continue to recover.
However, he pointed out that emerging market economies would continue to fuel the growth of the global economy as advanced economies led by the US and Europe continue to struggle.
“Having said this, a key risk to Philippine economic growth continue to be the uncertainty in the shape and speed of the global economic recovery, including whether it will continue to be multi-speed, and therefore a fragile one,” Tetangco explained.
Earlier, Socioeconomic Planning Secretary Cayetano Paderanga Jr. said the Aquino administration is confident that this year’s GDP growth target would be achieved despite lower projections set by multilateral lending agencies led by the World Bank.
“Our target of seven to 8% is a target designed for poverty reduction so we will design our policies to hit that target,” Paderanga said.
Paderanga said the National Economic and Development Authority (NEDA) would be designing policies and projects that would generate employment so that the government would meet its growth target for the year.
Last week, the World Bank said it expects the “Philippines to post another respectable growth this year, although at a slower pace as the economy.” It said the economy is expected to return to normalcy after an “unusual expansion last year.”
In its latest publication, “Global Economic Prospects 2011,” the World Bank has set its growth forecast for the Philippines for this year and next at a range of 5% to 5.4%.