Saturday, 10 October 2009

RP growth may exceed even most optimistic forecast

Michelle V. Remo
Philippine Daily Inquirer
http://business.inquirer.net/money/topstories/view/20091009-229225/RP-growth-may-exceed-even-most-optimistic-forecast

MANILA, Philippines – The country’s actual growth rate may exceed government expectations for this year and the next, as the global economic turmoil eases, while domestic and global consumption pick up.

According to Victor Abola, economist from the University and Asia Pacific, the Philippines may see its gross domestic product (GDP) growing by 2.1 percent this year and by 4.4 percent next year.

His projections exceed that of the government, which forecast growth to range between 0.8 and 1.8 percent this year, and 2.6 to 3.6 percent next year.

In a presentation during the annual convention of the Rural Bankers Association of the Philippines (RBAP) yesterday, Abola said growing remittances and the government’s pump-priming efforts would make possible a faster-than-anticipated growth.

“The United States is already out of recession … the world economy is recovering from the crisis faster than the usual,” Abola said during his presentation.

According to economists, the United States may be out of a recession, but its employment and manufacturing output remain problematic.

Citing an earlier study by the International Monetary Fund, Abola said economies in crisis usually require 3.2 years to fully recover. He said the current crisis proved to be short-lived than those in the past, noting that the global economy was already on its way to recovery.

Abola said the Philippines would benefit from improvements in the economy of the United States, which is the country’s biggest export market and home to many Filipino workers.

The United States account for about 17 percent of the Philippines’ export earnings.

Exports account for 29 percent of the Philippines’ total economic output.

In the first seven months of the year, Philippine exports reached $20.53 billion, down 31.7 percent from $30.06 billion in the same period last year.

Although the Philippines did not sink into a recession, the economy still posted much slower growth. In the first half of the year, the country’s economy grew by an average of 1.5 percent.

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