RP'S 2007 GROWTH HIGHEST IN 31 YEARS
MANILA, FEBRUARY 1, 2008 (STAR) By Ted Torres - The Philippine economy grew 7.3 percent in 2007, the highest growth rate in 31 years, the government reported yesterday.
In 2006, the economy grew by 5.4 percent.
The government attributed the increase to “positive growth” in all sectors of the economy, led by services and industries.
“In an environment of benign inflation, low interest rates and a strong peso, the Philippine economy turned in its best performance in 31 years,” said Romulo Virola, secretary-general of the National Statistics Coordination Board.
“I think this was more or less discounted by the market. But even so, it was slightly higher than what most people had expected,” Astro del Castillo, director of the Association of Securities Analysts of the Philippines, told AFP. “What we are worried about now is moving forward.”
Gross national product (GNP) expanded to 7.8 percent from 6.1 percent largely due to the money sent home by Filipinos working overseas.
However, net factor income from abroad (NFIA) slipped slightly to 12.6 from 13.3 percent in 2006.
In the fourth quarter of 2007 alone, the country’s gross domestic product (GDP) expanded by another record 7.4 percent from 5.5 in the same period in 2006.
Socio-economic Planning Secretary Augusto Santos said the full year growth rate “exceeded market expectations.”
As earlier predicted, the services sector took the growth lead, expanding by 8.7 percent in 2007, better than its already strong 6.7 percent in 2006.
Industry grew by 6.6 percent and agriculture, fishery and forestry (AFF) from 3.8 to 5.1 percent.
The industry sector was boosted by the 25 percent growth of the mining sector coming from gold, copper, nickel and other metallics.
Only the government services moved in negative zone within the services sector. The leader in that sector was the financial sector, particularly the insurance industry.
Total contributions of OFWs last year rose to another record level of $16.5 billion or 19.5 percent higher than the $13.8 billion in 2006.
Tourist arrivals was at 3.1 million in 2007, propping up domestic travel and trade in the country. As a result, the financial services likewise did very well in 2007, so were the trading and logistics sectors.
Malacañang said that the high growth rate registered in 2007 was a clear manifestation that President Arroyo has taken the right economic strategies and fundamentals and steps have been taken to sustain the momentum.
According to deputy presidential spokesperson Anthony Golez, the administration took the necessary steps to ensure that the country would achieve a new level of economic maturity and stability.
Golez said that the administration intends to sustain the growth momentum by investing in more infrastructure as well as the people in order to improve the country’s competitiveness in the global market.
“The key to continuing the growth momentum is to invest in our people and projects, particularly in areas with the highest multiplier effects and in infrastructure that will upgrade the competitiveness of the Philippines,” Golez said.
He said that the President would continue to lead the country until the end of her term with “a bigger stride in economic growth, surge of more foreign investments, more jobs for our people, strong currency and better delivery of basic services that will all be benefiting the poorest sector of our society.”
“These investments have also structurally prepared the country to weather the inevitable US recession thereby mitigating the consequential effects to our economy,” he said.
The President said that the government has been able to step up its anti-poverty program because of the renewed strength of the Philippine economy.
Speaking at the National Congress on Education at the Manila Hotel yesterday, Mrs. Arroyo said that the economy has turned around from being a laggard to one that is experiencing 28 consecutive quarters of growth.
“Our stock market is up, seven million jobs were created in seven years and our currency is one of the strongest in Asia,” the President said.
“Investments are surging and many new companies are investing in us. We are one of the best values in Asia right now and we can be the best value if we are able to match education and job requirements,” she added.
Mrs. Arroyo emphasized that poverty alleviation is still the goal of her administration and that she would continue to focus on this.
“Balancing the budget is just the first step. Over the next few years, we will translate the positive results of our reforms to real benefits for the people,” the President said.
Original target remains
Despite the positive growth conditions last year, Santos said the government will retain its original 2008 growth target of 6.3 to seven percent.
Export target was placed at “less than 10 percent” after a disappointing 3.1 percent in 2007.
Inflation target, meanwhile, is from 2.5 to 4.5 percent due mainly to concerns over the volatility of world oil prices and the prospect of an economic recession in the US.
“There are still clouds in the horizon,” he added.
Based on a study made by the National Economic and Development Authority (NEDA), a one percent contraction in the US economy can result in a 1.764 percentage point contraction in the Philippine GNP.
The US remains the country’s leading trade partner although its contribution shrunk slightly while trade with the rest of Asia and the Pacific has increased.
Remittances from OFWs and migrant Filipinos based in the US remains the leading contributor.
The leading business process outsourcing (BPOs) firms are US-based, and the main market is the North Americas. - with Marvin Sy
Chief News Editor: Sol Jose Vanzi
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