Economy to grow 6% this year - UA&P

MANILA, Philippines - The Philippine economy is likely to expand by at least six percent this year as government spending improves, an economist said in a report.

According to Victor Abola, economist at the University of Asia & the Pacific, the government is expected to boost spending in 2012 to make up for the lackluster spending in 2011.

Abola expects the industry sector to grow by 6.5 percent in 2012, above the projected five percent growth for 2011.

Similarly, he expects the services sector to expand by 6.2 percent in 2012, above the projected 5.5 percent for 2011.

Abola’s six percent GDP growth projection is the higher end of the official economic growth range of five percent to six percent for 2012.

Under spending by the government and global uncertainties continued to drag down economic growth in the third quarter of last year, with gross domestic product (GDP) expanding by only 3.2 percent from the 7.3 percent growth in 2010 and from the revised 3.1 percent recorded in the second quarter last year, latest data from National Statistical Coordination Board (NSCB) showed.

The third quarter economic performance brought GDP growth in the first nine months of 2011 to 3.6 percent.

Despite this, the Socioeconomic Planning Secretary Cayetano Paderanga Jr. earlier said the government may still grow by five percent in 2011, which is the midpoint of the government’s official forecast of 4.5 percent to 5.5 percent for the period.

Estimates from the National Economic and Development Authority (NEDA) showed that the economy in the fourth quarter of 2011 must have expanded by 7.8 percent for full-year growth to hit 5.5 percent.

While analysts have blamed the government for weak spending, economic managers said the global environment also dampened growth.

Officials said the impact of the tsunami in Japan lingered longer than expected and made worst by the recent floods in Thailand.