Gov't still hopeful for 7.5% GDP in 2014

The government has not given up on the high end target of the 6.5- 7.5 percent Grossn Domestic Product ( GDP) growth range this year despite its admission that it is a challenge and that achieving the low end of the target is more likely.

Socio-economic Planning Secretary Arsenio Balisacan in a speech at the 52nd Annual Meeting of the Philippine Economic Society in Makati said that he was still confident of meeting this year’s growth target.

"The low end of the growth target would still be met, but the higher end target is a challenge," Balisacan said.

Balisacan, however, also stressed that the government has not given up of meeting the high-end target.

"Nothing is impossible," Balisacan said noting some positive factors are working in favor of the domestic economy that could still help boost growth in the second semester.

For instance, he cited the strong growth in exports. For the first half of this year, GDP expanded at 6 percent, below the 7.8 percent in the same six months of last year. A 6.9 percent growth in the second half of 2014 is needed to achieve the lower end of the 6.5 percent to 7.5 percent full-year growth target.

He noted though that he was surprised that exports posted strong growth in the third quarter despite all expectations that the lingering port congestion was going to impact third quarter results.

The country's chief economic planner even noted the government will review growth targets for exports noting the electronics sector, the country's single largest exporter.

Data showed the country’s merchandise exports increased by 9.2 percent to $40.75 billion from the $37.33 billion reported from January to August last year. The electronics sector rose by 5.17 percent to $16.28 billion from $15.28 billion while the non-electronics sector grew by 12 percent to $24.47 billion from $21.85 billion.

In the first eight months of 2014, the Philippines’ export growth of 9.2 percent was second to Vietnam’s 14.9 percent.

This prompted the Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI), which tracks the export performance of the country’s electronics and semiconductor industries, to raise their growth projection to 5 to 8 percent from their initial 5 percent target due to strong demand on their products.

But Balisacan also said that govern- ment is not going to revise the growth target this year and the 7-8 percent GDP growth forecast for 2015-2016.

On the slower growth in the agriculture sector, Balisacan said this may not have a huge impact on the country's overall growth because it only accounts for a small 11 percent contribution to GDP. The agri sector grew 9.55 percent in terms of value and 0.33 percent in volume in the first nine months this year.

But since majority of Filipinos are engaged in agriculture, Balisacan said that a slower lower growth in agriculture will have a negative effect on the country's poverty incidence and employment figure.