6.5-7.5% GDP growth target attainable - Salceda
Economist turned politician Albay Rep. Joey Salceda said the Philippines has good prospects in attaining 6.5 to 7.5 percent full-year gross domestic product (GDP) growth rate this year because of its strong agriculture, industry, and services sectors.
Salceda, who chairs the Committee on Ways and Means in the House of Representatives, has highlighted the importance of the economy’s supply side where economic growth is generated.
Salceda cited the country’s comparative advantage in the business process outsourcing (BPO) sector, particularly in call centers.
He also added that robust remittances from overseas Filipino workers (OFWs) would continue to boost consumption.
“We make money from abroad and then spend it here. So, for example, OFWs are still increasing by three percent per year, so there is a driver in your domestic consumption,” he said.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed personal remittances inched up by 2.9 percent to $33.59 billion in end November last year from $32.65 billion in end November 2022.
During the January to November period, cash remittances coursed through banks went up by 2.8 percent to $30.21 billion from $29.38 billion in the same period in 2022.
In terms of agriculture, Salceda said the prospects are also good because the new agriculture secretary, Francisco Tiu Laurel Jr., is focused in the implementation of Department of Agriculture’s (DA) programs aimed at boosting production.
With Secretary Laurel’s strong grasp of the agricultural sector, Salceda said that instead of 2.5 percent, the sector could even achieve higher growth this year.
“Looks like we can top that,” he added.
According to him, the agriculture sector has been growing by 2.5 percent over the past 15 years, while the services sector grew at a faster pace of 5.5 percent and industry at 4.5 percent.
After contracting by 9.6 percent in 2020 as the economy stalled due to strict COVID-19 quarantine and lockdown protocols, the Philippine economy rebounded with a GDP growth of 5.7 percent in 2021.
The GDP expansion accelerated further to 7.6 percent as all COVID-19 restrictions were fully lifted.
The economic growth likely slowed in 2023, missing the government’s six to seven percent growth target, due to the impact of higher interest rates on both public and private consumption.
Although there was a slowdown in the economy, Salceda explained there would be productive capacity and food security if the agriculture and industrial sectors are performing well.
Agriculture growth is also important in the government’s campaign to fight poverty, he said.
The Philippine economy generally performed well in 2023, despite the magnitude of the challenges that the country has faced and which continue to persist, NEDA Secretary Arsenio Balisacan said.
The Development Budget Coordination Committee (DBCC) aims to grow the GDP between 6.5 and 7.5 percent this year to generate economic opportunities, increase employment, raise per capita incomes, and elevate Philippine economy to “upper-middle-income-country” status by 2025.