Economy seen to grow by 7% in third quarter

MANILA, Philippines - The economy may expand by more than seven percent in the third quarter of the year given the strong performance of exports in August, Finance Secretary Gil Beltran said yesterday.

“Third quarter growth could even be higher than seven percent,” Beltran said.

He said this is largely because of the strong exports growth of seven percent in August.

Exports grew 36.6 percent year-on-year in August from the 35.9-percent year-on-year growth in July.

This developed as the National Economic and Development Authority (NEDA) said that the Philippines may exceed its 2010 exports growth target of 15 percent.

“At this rate, we are optimistic that the country could exceed the 2010 exports growth target of 15 percent,” said NEDA officer-in-charge Rolando Tungpalan.

Beltran, for his part, believes that 2010 growth may be above the higher end of the five-percent to six-percent gross domestic product (GDP) growth target for the year set by the interagency Development Budget Coordination Committee (DBCC).

“I am sure the whole year will exceed six percent growth,” he said.

However, Socioeconomic Planning Secretary Cayetano Paderanga Jr. has said that economic managers have yet to assess the current environment to see if there is a need to upgrade the growth targets.

At the same time, Paderanga said it was too soon to say if 2010 growth could hit seven percent or eight percent because other growth drivers present in the first half of the year such as election spending are no longer there.

In the second quarter of the year, GDP grew by 7.9 percent in the second quarter of the year, up from a revised 7.8-percent performance in the first quarter of the year.

The Asian Development Bank (ADB), for instance, upgraded its GDP growth forecast for the year to 6.2 percent from five percent previously on the back of a rebound in trade and investment and growth in private consumption.