CEBU, Philippines - The country’s remarkable first quarter performance may have not impressed other sectors and some economists but Cebu’s private sector leaders maintain their optimism of the country’s upswing growth saying election spending is only one of the contributors, but not the major factor.
This as former National Treasurer and University of the Philippines (UP) professor Leonor Briones said that the Gross Domestic Product (GDP) growth for the first quarter of 2013 was expected because of the high election spending as well as infrastructure spending.
Briones said it only benefited certain sectors but not ordinary citizens.
“Even before election money was out, we were already growing. Although election spending helped in our first quarter growth, it is not the main source of our strengthening economy,†said Cebu Chamber of Commerce and Industry (CCCI) president Lito Maderaso in an interview yesterday.
Maderaso believes that the GDP jump of the Philippine economy in the first quarter is due to the growth of industries across sectors.
In Cebu for instance, he said the growth is mainly derived from tourism, information, communication, technology (ICT), real estate, construction sectors.
“Definitely, the growth is not artificial. I believe it will sustain in the next quarters. The economy has improved significantly. We see the low interest rate has sustained and blue chip companies showed positive results. Election spending always give a jump to economy, but it is not the main factor of the growth,†Maderaso added.
Cebu Business Club (CBC) president Gordon Alan Joseph also said that unlike in the previous election period where the country saw high jumps in personal spending, this did not happen in the first quarter this year.
“In fact, this was confirmed in recent conversation I had with the head of a major consumer logistics company, he told me that there was no jump in their deliveries unlike in the previous election years. The growth came from construction and manufacturing,†Joseph said.
Banker Prudencio Gesta, who is also the former president of CCCI, also downplayed the negative opinions on the GDP growth, saying the incomes derived from services, through OFWs (remittances), BPOs, tourism, real estate developments, construction and government infrastructure spending are the main reasons of sustained favorable GDP growth of the country.
“We also recognized that election spending in the first quarter has also contributed to the strong growth, which we expect to sustain in the second quarter,†said Gesta.
The Philippine economy expanded 7.8 per cent in the first quarter, the fastest pace since 2010 and outpacing China, led by growth in services and industry.
Quarterly growth rate was the highest since reformist President Benigno Aquino took office in 2010 on a promise to fight corruption and cut poverty.
The Philippines has bucked a regional trend of slowing growth amid recession in Europe and a slow recovery in the United States. It expanded faster than Asian powerhouse China, where the economy unexpectedly slowed to 7.7 per cent growth in the first quarter.
The 2013 first quarter GDP growth showed that the Philippine economy outperformed other Asian economies, including China, which grew by 7.7 percent; Indonesia, which grew by 6.0 percent; and Malaysia, which grew 4.1 percent.
Last year, the country posted a 6.6 percent full economic growth – 6.4 percent in the first quarter; 5.9 percent in the second quarter; 7.1 percent in the third quarter, which was the highest for the year; and 6.8 percent in the fourth quarter. /JOB (FREEMAN)