Economy to grow over 5% this year, says Paderanga

MANILA, Philippines - The Philippine economy may grow by more than five percent this year and finally beat the lower end of the government’s five percent to six percent forecast range for 2012, an economic manager said yesterday.

Socioeconomic Planning Secretary Cayetano Paderanga Jr. said growth this year would be significantly better than last year on the back of government plans to boost spending.

 “We’re hoping it could be higher than five percent,” he told reporters on the sidelines of an investment forum yesterday.

He said that because of government efforts to boost spending, the chances of achieving higher economic growth rate are better this year compared to 2011.

“We know that we will be spending more in infrastructure. Budget spending this year will be much more efficient than last year,” he said.

To boost spending this year, the Aquino administration has allocated P19.6 billion in counterpart funds for the government’s Public-Private Partnership (PPP) program.

This is higher than last year’s P12.5-billion counterpart budget. Of the P19.6-billion allocation, P8.6 billion will be given to the Department of Transportation and Communications (DOTC) to shore up PPP initiatives under its wing.

A total of P6.6 billion of the DOTC’s total budget will be used to implement six PPP projects such as development programs for the Panglao Airport in Bohol, the Puerto Princesa Airport in Palawan, and the New Legazpi Airport in Albay.

When asked if he supports the Department of Trade’s six to seven percent economic growth projection for the year, Paderanga said, “I would like to agree with that.”

According to the latest data from the National Statistical Coordination Board (NSCB), the Philippine economy grew by only 3.7 percent last year, failing to hit even the lower end of the revised target range of 4.5 percent to 5.5 percent for 2011.

The lackluster growth is much slower than the 7.6 percent gross domestic product (GDP) expansion recorded in 2010, NSCB data also showed.

Government officials blamed the crisis in the United States and in the Eurozone, saying this affected export revenues.

However, for this year, Paderanga said that exports are likely to recover along with the recovery of the United States economy.

 “It looks like the US has already turned the corner,” Paderanga said.

He also said public construction would be a major driver of growth for 2012.