Philippine economy to grow close to 6% in 2012 – official

MANILA, Philippines – Due to the expected strong private and public consumption in the second half of the year, the President’s economic managers are confident that the economy can hit close to a 6% growth by yearend.

During the 2012 Mid-Year Economic Managers meeting on Monday, September 17, National Economic and Development Authority (Neda) Arsenio Balisacan said the government may hit close to the high-end of the 5% to 6% target for 2012.

(For the live blog on the 2012 Mid-Year economic briefing at the Philippine International Covention Center, click here.)

Balisacan said growth in the second semester is expected to be driven by the implementation of various infrastructure projects, increased investments, and domestic consumption.

“With the healthy macroeconomic fundamentals, the buoyant business expectations, improved global competitiveness, the Philippine’s GDP (Gross Domestic Product) is expected to reach its growth target of 5 to 6%, most likely the upper end of the trend for this year,” Balisacan said.

The Philippines grew by a phenomenal 6.3% in the January to March, and 5.9% in April to June, making the country one of the fastest growing among peer countries in Asia. 

Despite the rosy economic outlook and the high expectations on the Philippine economy, the government does not not intend to revise its targets.

Balisacan said there is no point in revising the targets right now given that the economy, statistically, only needs to grow by around 4% to 4.5% to meet the government’s targets for the year.

Inequality still high

International Finance Corporation (IFC) Philippines Resident Representative Jesse Ang said that while growth has been strong and the outlook remains positive for the country, there are many things that need to be done.

Ang said that one of the important things to be addressed is the high inequality in the Philippines.

He said the country has the highest rate of inequality in East Asia, higher than Thailand and China. This is based on the GINI coefficient, a measure of inequality used worldwide.

Ang said this is largely because of the structure of growth which has been driven by only a “few companies.”

“One of the biggest concerns we have is that we’ve not been very inclusive. Our structure has been one that we are very much driven by just a few companies, relatively speaking. One of the factors that we look at is the GINI coefficient and the Philippines is the highest among the East Asian countries. Though we’re not that far from Thailand and China, nonetheless, we are the highest,” Ang said.

He also said that poverty reduction in the Philippines has also been very slow, causing the Philippines to lag behind most of the country’s neighbors.

Ang said that the Philippine’s neighbors such as Thailand and Malaysia were able to bring down poverty to below 10% while the country could barely reduce its poverty rate to below 20%.

Based on the 2009 poverty statistics, poverty rate in the country has increased to 26.5% from 26.4% in 2006.

“Indonesia and Vietnam have brought down poverty by around. 50% over the same period. Indeed, there’s still much to do,” Ang said. – Rappler.com