links: http://www.gov.ph/2013/05/30/statement-the-socioeconomic-planning-secretary-on-the-q1-2013-performance-of-the-philippine-economy-may-30-2013/
Statement: The Socioeconomic Planning Secretary on the Q1 2013 Performance of the Philippine Economy, May 30, 2013
Statement of Secretary Arsenio M. Balisacan:
On the Performance of the Philippine Economy in the First Quarter of 2013
[Delivered during the National Statistical Coordination Board meeting in Makati City on May 30, 2013]
Good morning.
It is with great pleasure to report to
you today that the Philippine economy, as measured by the Gross Domestic
Product (GDP) expanded by 7.8 percent in the first quarter of 2013. I
should just say that the numbers speak for themselves, but allow me to
go into specifics.
First of all, this growth rate of 7.8
percent exceeded market forecasts, including my own. But please note
that I was the most optimistic of all. Secondly, this is also the
highest among the major East and Southeast Asian economies, particularly
Indonesia (6.0%), Thailand (5.3%), Vietnam (4.9%), and the People’s
Republic of China (7.7%). This achievement occurred at a time when OECD
just downgraded its growth forecast for the year for most advanced
economies and China.
This growth figure is significant since
it puts to rest the doubts cast on the 2012 figure as being due to base
effects only. It also indicates to us that we may now be moving along a
new growth trajectory. And by the way, GDP in 2012 actually grew by 6.8
percent.
Business confidence and consumer
optimism fuelled this growth, and this is not without basis. We have
been aggressively addressing the infrastructure bottleneck. And this is
evident in the 45.6 percent increase in public construction. The private
sector is heavily investing in capacity as well. Adjusting for its
magnitude, the contribution to growth of private construction is at
least three times that of public construction. In fact, including other
private sector investments such as on durable equipment, expenditure in
capital formation, for the first time, contributed more to GDP growth
than household consumption expenditure.
We are committed to maintaining
macroeconomic stability. Inflation continues to be low and stable, and
the fiscal deficit at sustainable levels, including external performance
indicators. And we have passed the scrutiny of two of the major credit
rating agencies, Fitch and Standard & Poor’s, which awarded us an
investment grade rating. This will further reduce the cost of capital
and we hope that the business sector will take this opportunity to
expand their investment interests and generate more employment.
Government consumption grew by 13.2
percent due primarily to its support for social programs such as the
Pantawid Pamilyang Pilipino Program (4Ps) and safe and potable water
supply for water-less barangays nationwide.
Net exports contracted primarily due to a
decrease in external demand for electronic components. This situation
is expected to hold until the rest of the year. For this reason, it is
imperative that we diversify into other products and markets. In the
immediate term, however, expansion in output can still be absorbed by
the domestic market, supported by a better employment situation, strong
inflows of remittances from Overseas Filipinos, and the low and stable
inflation.
On the production side, we are happy to
note that growth was broad based as all major sectors contributed
positively to growth during the period. Services expanded by 7.0
percent; industry, by 10.9 percent, agriculture sector by 3.3 percent.
The manufacturing sector contributed the
most to the growth in industry. I am proud to say, that despite the
contraction of 8.4 percent in our goods exports, local manufacturing has
grown at an impressive rate of 9.7 percent, primarily from what can
only be deduced as a heightened domestic demand. The main contributors
to the strong growth of manufacturing were manufactures of food,
household appliances, communication equipment, chemical and chemical
products, transport equipment, and machinery and other equipment.
The next highest contributor to growth
in industry is construction. The 32.5 percent strong growth of
construction also indicates a good positioning towards an industry-led
economy. The sector has been increasing rapidly with double digit growth
rates since the second quarter of 2012. Initially, this was led by
infrastructure spending of the government. By the second half of 2012,
private construction started to rebound.
Financial intermediation recorded the
highest contribution to growth among the subsectors in services. Output
expanded by 13.9 percent as outstanding loans increased, even as
non-performing loans declined.
Retail trade remained strong as the
spending capacity of Filipinos continued to grow due to the improving
employment situation, a 5.6 percent growth in overseas Filipinos
remittances, and the 3.2 percent inflation rate that fell within the
full year inflation target of the government.
Meanwhile, tourism and other related
industries supported the growth in Other Services. Tourist arrivals grew
by 10.8 percent in the first quarter of 2013, which resulted in a
growth of 21.3 percent in Recreational, Cultural, and Sporting
Activities.
Real estate, renting, and business
activities continued to benefit from the sustained demand in residential
and office spaces, which has led to a spur in growth in condominiums
and commercial buildings within the business districts. Also, offshoring
and outsourcing activities continued to expand.
Lastly, the agriculture sector growth
catches up with a 3.3 percent rate for the quarter. The fisheries
subsector bounced back from a series of contractions, and came in strong
with a 5.5 percent growth rate. This demonstrates that sustainable
management in fishery is also an effective growth strategy for the
sector.
We are now halfway through our
Philippine Development Plan (PDP) 2011-2016. We have accomplished a lot,
but so much has changed both within our domestic confines and in the
rest of the world. For this reason, the President has instructed the
updating of the PDP, including the strategic framework that will bridge
the gap from where we are now, to where we intend to be.
Per capita GDP grew by 6.1 percent in
the first quarter of 2013, faster than the 4.7 percent growth a year
ago. This means that from the first quarter of 2011 to the first quarter
of 2013, per capita GDP has increased by 11 percent, in real terms. We
know, however, that inclusive growth is not about averages, but about
the lower part of the income distribution, namely, the poor. On the
other hand, we also know that growth is still the necessary condition
for inclusive growth. The solution, therefore, is to create the
conditions for sustained growth in other sectors or areas with high
growth potential and link the poor to these growth centers. The faster
this can be done, the better it will be for the greater number of our
people.
In addition to addressing the critical
constraints to private investments, we will also put emphasis on
innovation, technology and research and development. We will facilitate
the improvement in labor productivity by investing in human capital and
providing the capacity for the labor force to engage in higher value
activities. What all these demands is a greater sense of urgency among
us in government as well as better coordination between and among the
various agencies charged with implementing programs and projects. Under
the leadership of our President, we are coordinating our programs and
projects to maximize efficiency and effectiveness.
Going forward, we intend to focus the
economy on priority sectors that are potential growth drivers and
job-generators such as infrastructure, manufacturing, agriculture,
tourism, logistics, BPO/IT, shipbuilding, housing, and the halal food
industry.
We remain vigilant of downside risks.
Disasters can negate the gains and even push back development.
Moreover, the global economy remains fragile, negatively affecting our
trade performance. Due to the attractive investment opportunities, we
are also at risk of receiving too much capital inflows as advanced
economies implement quantitative easing. The challenge is to channel
these inflows into productive investments.
We remain positive in our outlook and we
will translate this into positive action to achieve inclusive growth.
We hope that the private sector will maintain a positive outlook as
well, and translate this into greater participation in the growth
process.
Salamat at Mabuhay Tayong Lahat.
GPH Website
http://www.gov.ph/
links:
links:
http://www.gov.ph/2013/05/30/statement-the-socioeconomic-planning-secretary-on-the-q1-2013-performance-of-the-philippine-economy-may-30-2013/
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