RP'S ECONOMY GREW 6.1% IN 2004, HIGHEST GROWTH SINCE 1996
MANILA, February 1, 2005 (STAR) By Marichu Villanueva - The country’s economy grew 6.1 percent in 2004 — the highest growth rate since 1996 — and President Arroyo gave credit to small and medium enterprises as well as young professionals at call centers for attracting investors into the country.
The gross domestic product (GDP) growth exceeded government forecasts of 4.9 to 5.8 percent, according to figures from the National Statistical Coordination Board (NSCB).
"The NEDA (National Economic and Development Authority) will officially report to our nation that our gross domestic product grew by 6.1 percent in 2004," the President said, adding that she was "delighted" with the growth figures.
GDP represents the country’s total annual production of goods and services, minus overseas remittances.
"This is our highest since 1996 and shows the resiliency and capacity of our people to overcome crisis, work hard and keep on track to a better future," Mrs. Arroyo said in a statement.
Romulo Virola, NSCB secretary general, said the services sector was the best performer, growing 7.3 percent from 5.8 percent in 2003.
In a statement, the NSCB said agriculture, fishery and forestry grew 4.9 percent, up from 3.8 percent in 2003, while industrial growth rose to 5.3 percent from 3.8 percent.
"Services, which accounted for about 47 percent of total gross domestic product, contributed the most to GDP growth with 3.37 percentage points," the NSCB said.
"All of its sub-sectors posted accelerated growths in 2004. Top contributors to growth were trade, transportation, communications and storage, and private services.
"Industry accounted for about 33 percent of GDP and contributed 1.77 percentage points to the total GDP growth rate," Virola said in a statement.
The stock market reacted favorably to the news, with the composite index rising 0.25 percent to 2,019.56, its highest level in nearly five years.
"The growth rate was within expectations but the market is happy with a healthy gain for the economy despite high oil prices and rising inflation," said Lawrence de Leon of Accord Capital Equities.
Guillermo Luz, executive director of the influential Makati Business Club, said the growth rate was quite good, considering that "last year was perceived to be a bit of a difficult year."
"We had so many events," which could have hurt the economy, such as a series of destructive typhoons and uncertainty following Mrs. Arroyo’s victory in elections in May which the opposition had charged was due to cheating, he said.
Luz said the growth in agriculture had been "the big surprise," of the year, adding that this would greatly benefit the 30 percent of the workforce who are dependent on that sector.
However, Luz said growth was not likely to be as high in 2005, remarking that "the expectation is slightly more tempered for 2005 than for 2004."
"There is an expectation that inflation and interest rates will be higher due to the high price of imported fuel and the continuing budget deficit of the government which will force it to borrow more money," Luz explained.
Sentiment "is still bullish but not as bullish as last year," he added.
Speaking at the 14th anniversary celebrations of the Philippine National Police (PNP) at Camp Crame, Quezon City yesterday, Mrs. Arroyo said industry and services are picking up due to higher farm incomes and that overseas remittances are adding fuel to the country’s growth engine.
The Chief Executive lauded the "young professionals manning the various call centers and outsourcing firms" for their part in attracting investors.
"And I would like to thank specially our service sector, transport and communications, especially and our trade services for picking up, complemented by our support to boost micro, small and medium enterprises," she said.
Mrs. Arroyo thanked Congress for "putting our fiscal house in order" and the country’s farmers who managed to maintain high productivity despite the floods and typhoons late last year which destroyed large areas in eastern Luzon.
She also thanked PNP chief Director General Edgar Aglipay and the 115,000-strong police force for their vigorous campaign against criminals, which had also greatly helped in attracting investors.
"The rampart of our national security must be held firm as our economy grows," she said.
"Overall confidence in our nation lies in the full trust to the law. Our dedication as public servants to secure our people’s safety and protect (them from) their own scalawags, white collar or otherwise, must be unassailable."
Mrs. Arroyo said the picture of economic growth should further challenge Filipinos to work harder to sustain the positive developments.
"Our institutions are humming the tune of growth," she said.
"We, in the executive branch of the government, must do our share… the Congress and the Senate are doing their share who are addressing the challenge by keeping the food supply and price stable…," the President said.
Last week, the peso rallied towards 54 to $1 at the close of trading. — With reports from Christina Mendez, AFP
Reported by: Sol Jose Vanzi
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