The National Economic Development Authority (NEDA) projects the economy to grow from 6% to 7% this year based on the improved business and consumer confidence particularly in the last quarter of 2012.
During the recent Cargo Economics Conference, Emmanuel F. Esguerra, NEDA Deputy Director General, said that this growth is bigger than the 6.6% GDP performance in 2012.
As it is, the 2012 growth is already the fastest in Asia, next only to China.
What helped this performance is the country’s low and stable inflation contained at about three percent, favorable interest rate and sound banking system, and a sustainable fiscal and external position, he explained.
On the supply side, the services sector accounted for 7.4%; industry, 6.5%; and agriculture, hunting, forestry and fishing, 2.7%.
Of the services sector, transport, communications and storage represented some 7.5% in the 2012 GDP growth, followed by real estate and renting at 7.90%.
Government expenditure (11.8%), exports (8.7%) and household consumption (6.1%) fuelled last year’s demand, with exports reaching a record $51.994 billion or 7.6% growth over the $48.3 billion in 2011. The government is maintaining its ten percent export growth target for this year.
In December alone, exports rose 16.5% to $3.97 billion, reversing its 18.9% fall in the same month of 2011. This is despite a 5.5% decline in electronics shipments to $1.506 billion. Such performance was the best in Asia, with Hong Kong managing 14.8% growth; China, 14.1%; Vietnam, 14.1% and Thailand, 13.5%
Sergio R. Ortiz-Luis Jr., President of the Philippine Exporters Confederation, Inc. (PHILEXPORT) separately explained that there is a need to adjust the goal to 15% annually to attain $120 billion by 2016, the export target indicated in the Philippine Export Development Plan (PEDP) 2013-2016, since last year’s growth is below the original ten to 11% target.
“The improving performance of the electronics sector will help us achieve this revised target,” Ortiz-Luis noted, adding that our product diversification program under the PEDP can help push the exports of non-electronics products such as machinery and transport equipment, woodcraft and furniture and fruits and vegetables.
Meanwhile, Esguerra’s presentation also showed that Philippine imports grew by 4.2% mostly from ASEAN, which is attributed to the increasing benefits from this regional trade agreement. Other top Philippine import markets are China, US and Japan.
Such improvement in the country’s external trade is reflected in the parallel growth in cargo throughput last year, which improved by 7.8% year-on-year to 90.9 metric tons, while ship traffic was 2.2% better.
Tourist arrivals bridged the four million mark in 2012, with the government expecting further tourist influx as the macroeconomic environment is positively sustained.
Esguerra also noted that the country’s improving competitiveness ranking will contribute further to the attainment of the 2013 targets.
“It is important to pursue policies that will contribute to the country’s goals in the near term”, he noted. These include stimulating domestic demand, diversifying domestic and external trade, accelerating fiscal spending and strengthening economic relations with fast-growing ASEAN economies.
Specifically on the logistics chain, he cited, among other recommendations, the need to encourage more infrastructure investments, upgrade and build new transport facilities and implement the National Transport Policy.
He however cautioned against challenges and risks such as the uncertainty in the Euro area; the ‘fiscal cliff’ of the US; possible spikes in global petroleum prices; El Nino and typhoons; delayed or non-implementation of reforms and persistent high unemployment and underemployment in the country. Liza Leong, PHILEXPORT News and Features