THE ECONOMY likely grew above target last year and could also outperform analysts’ expectations for 2011, the central bank chief yesterday said.
"We believe that 7% growth for 2010 is attainable given the Q1-Q3 (first to third quarter) ... actual growth rate and given the likely outcome of fourth-quarter performance," Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. said in an e-mail to reporters.
Gross domestic product (GDP) growth averaged 7.5% as of September and both the government and analysts expect the official 5-6% target for the year to be exceeded given surprisingly strong first half results.
The outlooks for 2011, however, diverge. The government has a 7-8% target but analysts expect growth to be well below that given continued global uncertainty.
Yesterday, HSBC Senior Vice-President Roland Gerard R. Veloso, Jr. told reporters he expected 2010 growth to have averaged 6.8%, easing to 5% this year.
A United Nations report released yesterday forecast an even slower 4.8% for this year.
Mr. Tetangco, however, said the right factors would allow this year’s goal to be achieved.
"We also believe that the 7-8% GDP growth target for 2011 is attainable, should consumption remain solid and investment gain further traction with the infrastructure programs of the government," he said.
Trade is expected to recover as the economies of the country’s trading partners improve, although much depends on how the global economy performs.
"A key risk to Philippine economic growth continues to be the uncertainty in the shape and speed of the global economic recovery, including whether it will continue to be multi-speed and therefore a fragile one," he said.
The government assumed a lower 5% GDP growth in its P1.645-trillion budget for this year. Officials have qualified that the higher 7-8% target would be due to the public-private partnership (PPP) scheme.
The government wants to bridge the country’s infrastructure gaps through PPP contracts that are expected to be bid out this year.
Mr. Veloso, however, expects the impact of PPP projects to "start to kick in and fuel the economy’s growth in 2012."
HSBC is helping the government by conducting road shows to pitch the PPP scheme to possible investors abroad.
"We... conducted a road show in London [last November] and we are having the next one in February in the Middle East," Mr. Veloso said.
The HSBC official also expects slower exports growth of 8% this year -- they were up 37% as of October last year -- with a pickup in the United States seen as a factor.
Unemployment was seen hitting 7.1% this year while the remittance growth forecast was set at 8.5%.
Wednesday, 19 January 2011