Phl economy exceeds growth target for Q4

I am reading the business page of both local and national newspapers lately and I am excited to see some positive economic news happening in the country today.

As a matter of fact, according to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Newsbriefs, a weekly digest produced by IDEA, Inc. to highlight the most recent national and international economic events, the Philippine economy grew by 6.8 percent in the fourth quarter of 2012, resulting in a 6.6-percent growth for the full-year estimate of the country’s gross domestic product. Improvements in the Manufacturing and Construction sectors, together with the strong performance of the Services sector (with growths of 5.6 percent, 18.4 percent, and 6.9 percent, respectively), allowed the country’s economy to achieve such a feat.

Per IDEA, on the demand side, growth was driven by the robust performance of both household and government expenditure and the rebound of external trade, growing by 6.9 percent, 9.1 percent, and 9.1 percent, respectively.

The government maintained its 6- to 7-percent growth target for 2013. Dr. Arsenio Balisacan, Director-General of the National Economic and Development Authority, stated during the National Income Accounts press release that the 6- to 7-percent target is still realistic, since there are still some risks and constraints that the country has to address, and a 7- to 8-percent growth will be achievable through massive investment activity and intensified infrastructure spending.

Also per same published report, heightened anticipation of Philippines gross domestic product figures helped the Philippine Stock Exchange index reach its 12th all-time high for the year, as it closed at 6,271.43 last Wednesday. Furthermore, in order to meet the targeted 16- to 18-percent tax effort ratio for 2016, Finance Secretary Cesar Purisima said in an interview that tax collection efforts will be intensified this year. The secretary stated that improving the collection of the Bureau of Internal Revenue and Bureau of Customs is necessary for its fiscal consolidation goal and for funding social infrastructure projects.

Likewise, reports released by separate agencies expressed upbeat outlooks for the Philippines economy. Moody’s Analytics and Citi, in their respective reports, stated that it is very likely for the country to experience growth that is much faster than targeted. This current, steady growth pattern may be sustained well into the coming year, according the both analytic groups.

Lastly, European Union (EU) Ambassador to the Philippines Guy Ledoux said that EU’s development assistance for the Philippines will be focused on Mindanao and in health-related projects in the country. Ledoux further stated that the financial aid has been set at PhP2 billion for this year, and that the EU intends to combine loans and grants for aid, as the Philippine economy is starting to shift into middle income status, according to the researchers of IDEA.

Editor’s Note: For comments, rejoinders and questions related to credit & collection, Mr. Ed F. Limtingco can be reached at [email protected].