Sunday, 30 May 2010

Robust growth in manufacturing, services

Boost dramatic increase in GDP

Manila Bulletin

Improved business and consumer confidence lifted the manufacturing and services sector to post significant upward adjustments, pushing the domestic economy to jump to 7.3 percent in the first quarter of the year.

According to Deputy Presidential Spokesman Gary Olivar, a combination of astounding growth in the manufacturing and services sector and improved business and consumer confidence amid a global economic recovery lifted gross domestic product (GDP) to 7.3 percent for the first three months of the year to 7.3 from 0.5 percent a year ago.

Olivar gave this explanation as the Palace refused to yield that election spending was the sole major factor that drove GDP up as has been alleged by President- apparent Benigno Aquino III.

Rather than “shooting from the hip,” Olivar said the incoming leadership should not squander the record-high economic growth that it would inherit from the Arroyo government and build on these gains to benefit the people.

“If Senator Aquino thinks our economic growth only came from campaign spending, all I can say is this--that's a lot of tarpaulin, senator,” he said.

“For now, these are salient findings: One, agriculture actually shrank by -2.5 percent mainly because of El Niño. Two, services as the other large sector of our economy contributed half of total growth, effectively making up for negative growth in agric. Three, industry-even if the smallest of the three sectors- contributed the other half of total growth because industry itself expanded by 15 percent.

Within this sector, manufacturing alone grew by a whopping 20 percent,” he said.

Olivar admitted that they expected election spending to help prop up domestic economy in the first quarter but its contribution was fairly small due to the advent of modern campaign methods. He said the P47 billion worth of direct foreign investments recorded, improved exports and imports, lower inflation, among others, have also contributed to the domestic economic growth.

Olivar meantime encouraged the next leadership to use this “wind on their back” to propel the economy to greater heights.

“This is good news so we have to monitor closely the next administration. They have the wind on their back, let’s hope they will not waste this,” he said. “If the economic growth slows down, they would have to answer to the people,” he added.

Olivar said they still hope people will rally behind the Aquino administration despite his doubts on the Arroyo government economic gains. “The President has repeatedly said she is leaving the government at his full disposal,” he said.

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