Paderanga says GDP growth will exceed 6% this year

MANILA, Philippines - The Philippine economy, as measured by gross domestic product (GDP), may grow by more than six percent this year, beating the official forecast range of five percent to six percent for 2012, Socioeconomic Planning Secretary Cayetano Paderanga Jr. said yesterday.

“We hope that if we are successful in our streamlining and governance reforms, we will be pleasantly surprised in our projection and hit more than six percent,” Paderanga said.

The government expects the economy to grow anywhere from five percent to six percent this year.

Paderanga said that as the Aquino administration had promised spending in 2012 would improve significantly with the early approval of this year’s P1.816-trillion budget.

In a press conference yesterday, Paderanga also said that the economy in 2011 may still have grown by more than five percent, the mid-range of the official forecast projection of four percent to five percent for last year.

He said Christmas spending has picked up, along with state disbursements for infrastructure projects and social services. “The (2011 growth) can still be above five percent,” Paderanga said.

However, Former Budget Secretary Benjamin Diokno said Paderanga is being too optimistic on this year’s economic growth outlook.

“I don’t share Paderanga’s exuberance. The prospect for the world economy has turned from bad to worse,” he said in an interview.

Diokno said that Philippine exports, overseas remittances and foreign direct investments are bound to be affected by the global uncertainty.

“Public construction will bounce back from its dismal performance in 2011 but it may be partly offset by the slowing private construction,” Diokno said.

He believes that the economic impact of the government’s PPP (public-private partnership for infrastructure) projects is likely to be minimal.

“Actual construction is likely to start in the fourth quarter of the year or in the first quarter of 2013,” Diokno said.

Victor Abola, economist at the University of Asia & the Pacific, on the other hand believes that the economy may grow by six percent this year, which is the higher end of the forecast range.

Under-spending by the government and global uncertainties continued to drag economic growth in the third quarter of 2011, 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 of 2011, 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.