PH econ growth exceeds market forecasts in Q1

7.8 growth rate in gross domestic product highest among Asean economies

PHILIPPINE economic growth surpassed market and government expectations in the first quarter of 2013 following robust performance of all major sectors during the period, according to the National Economic and Development Authority (Neda).

“The country’s gross domestic product (GDP) growth rate of 7.8 percent in the first quarter exceeded market forecasts and was also the highest among Asean economies, particularly Indonesia (6.0%), Thailand (5.3%), Vietnam (4.9%), even higher than that of the People’s Republic of China (7.7%),” said Socioeconomic Planning Secretary Arsenio M. Balisacan.

“Business confidence and consumer optimism fuelled this growth, putting to rest doubts cast on the 2012 figures as being due to base effects only,” he said.

The development on the production side was broad based as all major sectors contributed positively to growth during the period. Services expanded by 7.0 percent; industry, by 10.9 percent; and agriculture sector by 3.3 percent.

“Impressive performance of these sectors prove that the country is already reaping the benefits of strengthening priority sectors that are potential growth drivers and employment generators,” said Balisacan, who is also Neda director-general.

Heightened domestic de- mand led to the local manufacturing sector growing at an impressive rate of 9.7 percent.

Also stirring is the construction sector that grew 32.5 percent from January to March this year, indicating a good positioning towards an industry-led economy.

“Initially, this was led by infrastructure spending of the government. By the second half of 2012, private construction started to rebound,” Balisacan explained.

Retail trade remained strong as the spending capacity of Filipinos continued to grow due to the improving employment situation, higher overseas Filipinos (OF) remittances, and stable inflation.

The Agriculture sector growth is also catching up with a 3.3 percent growth rate as the fisheries subsector bounced back from a series of contractions to a growth of 5.5 percent during the quarter.

On the demand side, capital formation has primarily driven overall growth with its 47.7 percent expansion, surpassing the contribution of household consumption which grew by 5.1 percent.

“For the first time, expenditure in capital formation, including other private sector investments such as on durable equipment, contributed more to growth than household consumption expenditure,” Balisacan said.

Government consump-

tion also grew by 13.2 percent due to state support for social programs such as the Pantawid Pamilyang Pilipino Program (4Ps), agriculture development programs, and the rationalized MOOE for public elementary and high school under the Department of Education (DepEd).

Net exports, however, contracted primarily due to a decrease in external demand for electronic components.

“While we recognize our robust performance in the first quarter, we will continue to be vigilant against downside risks and address critical constraints to maintaining this growth momentum,” Balisacan said.

He said that it is also important to create conditions for sustained growth in other sectors or areas with high growth potential and link the poor to these growth centers.

“The faster this can be done, the better it will be for the greater number of our people,” Balisacan said.