Philippine economy up 7.1% in third quarter

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Wednesday, November 28, 2012

MANILA (2nd Update, 4:28 p.m.) -- The Philippine economy has grown faster than expected during the third quarter of this year, officials announced Wednesday.

National Statistical Coordination Board Secretary-General Jose Ramon Albert said that from July to September, the country's gross domestic product (GDP) accelerated by 7.1 percent from 3.2 percent a year ago.

"The beyond expectation third quarter growth was driven by the services sector with the robust performances of transport, storage and communication, financial intermediation, and real estate, renting and business activities supported by the five consecutive quarters of sustained accelerated growth of the industry and the seemingly weather tolerant agriculture sector," he said.

Following an upward revision for the second quarter GDP, the growth for the first nine months of this year has averaged at 6.5 percent, surpassing the upper end target of 6 percent for the whole year, the official added.

Socioeconomic Planning Secretary Arsenio Balisacan said that the Philippines posted the fastest economic growth within the 10-member countries of the Association of Southeast Asian Nations (Asean).

He cited that Indonesia, which came in second, posted a third quarter GDP growth of 6.2 percent, followed by Malaysia (5.2%), Vietnam (4.7%), Thailand (3.0%) and Singapore (0.3%). On the other hand, China registered a 7.7-percent GDP growth in the said period.

"We are well on our way to surpassing our growth target of 5-6 percent this year," he said.

Balisacan, who is also the director general of the National Economic and Development Authority (Neda), expressed optimism for higher growth in the fourth quarter of this year.

But he admitted that the government has remained cautious amid the challenges ahead, such as the problems in the Euro zone, and the looming fiscal cliff in the United States.

"The slow recovery in the US economy continues to affect us negatively as their monetary authorities try to prop up their economy through quantitative easing. This, combined with our strong macroeconomic fundamentals and good economic prospects, has resulted in the appreciation of our currency threatening to erode our competitiveness. Rest assured that we are monitoring this development very closely," he said.

Balisacan said that the Bangko Sentral ng Pilipinas stands ready to counter drastic volatility in the exchange rate, while the Department of Finance has also been looking to re-balance the composition of the country's borrowings in favor of domestic sources.

Malacañang welcomed Wednesday the positive development in the country's economy, saying that it was beyond the government's expectation.

"We were very pleased with the news that was relayed to us by Neda director general Arsenio Balisacan and certainly it was beyond our expectations," Presidential spokesperson Edwin Lacierda said.

"The fundamentals are there. We see no reason why we will not see the target set by Neda surpassed," the Palace spokesperson said.

He said the Palace is happy with the figures as the Philippine economy has shown both resilience and resurgence despite the global economic slowdown.

"This is historically a weak quarter for the Philippines and in spite of that we have shown robust growth in the third quarter of this year," he added.

Lacierda said the GDP growth was made possible due to sustained confidence in the leadership of President Benigno Aquino III who has consistently equated good governance with good economics.

"Underscored by deft fiscal management, responsible and transparent public spending, and a continuously strengthening partnership between government and business has resulted in a virtuous cycle for the Philippine economy," he said. "Government has also pushed to ensure this economic growth is felt by the broadest number of people."

He said that within the same nine-month period, the Aquino administration has enrolled more than three million beneficiaries under the Conditional Cash Transfer program and has distributed P20 billion for this priority social investment.

Lacierda noted that the spending for public health has also increased resulting in an expansion of health care safety nets and improvements in hospitals and health centers all over the country.

"Equitable and inclusive growth is a commitment of the Aquino administration that has prioritized the establishment of both social and physical infrastructure, which continues to redound to a more robust economy for the benefit of all Filipinos," Lacierda said. (Jill Beltran/SDR/Sunnex)

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