The National Economic and Development Authority (NEDA) has said it is optimistic that the 7-8 percent economic growth target in the next five years is achievable.
“The 7 percent to 8 percent GDP growth is still our target in the next five years. We hope the increase in investment will continue. We saw an underspending midway to the second quarter but we will increase our infrastructure spending,” Socioeconomic Planning Secretary Cayetano Paderanga said.
The NEDA chief said he expects the second quarter gross domestic product (GDP) to exceed the 4.9 percent growth in the first quarter of the year.
Paderanga, however, said that GDP is likely to be “slower” than the 8.4 percent growth in the second quarter last year.
In the first quarter, the country’s GDP grew by 4.9 percent amidst the geopolitical tensions in the Middle East and North Africa, the rising oil prices, and the contraction in public spending.
Compared with the performance of its Asian neighbors, Paderanga said the country’s GDP growth in the first quarter is higher than that of Thailand’s 3 percent, Republic of Korea’s 4.2 percent and Malaysia’s 4.6 percent.
He also said that the Development Budget and Coordinating Committee (DBCC) will review the 7 percent to 8 percent economic target this year after the second quarter numbers are out.
“Growth would be higher in 2012,” said Paderanga.
Earlier, Paderanga projected a stronger growth in the coming quarters in spite of the risks and uncertainties surrounding the country because of the timely and effective implementation of appropriate policies and reforms that are being undertaken.
These include measures such as addressing corruption and making the bureaucracy more efficient by streamlining processes to lower the cost of doing business for the private sector as well as expediting the release and utilization of budget for a more efficient and timely implementation of programs and projects, Paderanga said.
He said the GDP for the next five years would be boosted by the government’s public-private partnership initiatives.
Paderanga added that the government is on track to bid out 10 infrastructure projects under the PPP scheme this year.
The 10 PPP infrastructure projects lined up for this year include the P70-billion South Extension of the Light Rail Transit Line 1, P11.3-billion East Extension of LRT 2, P7.7-billion Privatization of LRT 1, P6.3-billion Privatization of the Metro Rail Transit Line 3, P11.8-billion Cavite-Laguna Expressway, and P10.6-billion second phase of the Ninoy Aquino International Airport Expressway.
Under the government’s Philippine Development Plan for 2011 to 2016, the 7-8 percent annual growth target will generate an average of one million new jobs annually and these will be found primarily in industry and services sectors.
It added that the 7-8 percent GDP target per year implies a tripling of per capita income to about $ 5,000 in two decades.
“This is a higher growth trajectory than the past decade’s and shall be attained through a higher contribution of physical capital to GDP growth, as well as through the increase in total factor productivity through massive investment in transport, water, energy and other infrastructure and through good governance,” the country’s economic blueprint said.
The PDP said sustaining growth in later year will require even higher investment ratios reaching 22 percent by 2016.
The government approved a total investment of P3.796 trillion by 2016. Paderanga also said that the country’s Medium-Term Public Investment Program (MTPIP) for 2011 to 2016 is expected to be completed this month or after President Aquino delivers his second State-of-the-Nation Address (SoNA) on July 25.
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