Regional News
PHILIPPINE ECONOMIC expansion will slow along with that of key Southeast Asian peers in the next five years, following near-term growth moderation amid global uncertainties, a report of the Organization for Economic Cooperation and Development (OECD) showed.
Growth of the country’s gross domestic product (GDP) will average 4.9% in 2012-2016 from 5.7% in 2003-2007, OECD’s latest projections showed.
The economy is expected to grow by just 4.5% this year, slower than the record 7.6% in 2010, although the report cited an earlier growth figure for 2010 — 7.3% — that has since been revised.
OECD’s “Southeast Asian Economic Outlook 2012” was prepared ahead of government’s announcement Monday of a third straight quarter of GDP growth deceleration — just 3.2% from July to September, resulting in 3.6% since the start of the year.
OECD’s projection for the year was within the 4.5-5.5% growth assumption of the Development Budget Coordination Committee (DBCC). However, the 2012-2016 projection was lower than the 7-8% yearly growth target set under the Philippine Development Plan.
The Philippines is also below the average 5.6% projected for six Southeast Asian countries for the five-year period.
In 2016, the Philippine economy is expected to grow by 5.1%, below the average 5.9% for the region, the OECD report showed.
OECD noted that “Global uncertainties, notably reduced confidence in US fiscal policy and continued Euro-area debt crisis, cast a shadow over Asian economies.”
The group of 34 developed economies noted that the slowdown became evident in the region since the second quarter of the year, as seen in weakened business and consumer sentiments and negative reaction in financial markets in some countries.
The impact, however, would be “limited” and the entire region’s economic growth should remain relatively “robust” up to 2016.
Southeast Asian countries Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam will revert to pre-2008 crisis average growth rate of 5.9% in 2016, OECD said.
While OECD projected a slowdown for the Philippines and below-par growth compared to the region’s projected average of 5% for 2011, it said “the Philippine economy shows resilience owing to domestic demand and [overseas Filipino] workers’ remittances.”
It noted that priority areas of the Philippine medium-term growth plan include infrastructure, human capital development and taxation.
OECD said lack of infrastructure investments could become a bottleneck to growth. Referring to the Philippines and Indonesia, it said “lack of adequate transport infrastructure impedes efficient trade activities.”
Ruperto P. Majuca, assistant director-general of the National Economic and Development Authority said 4.9% growth over 2012 to 2016 was too low, as government was working toward 7-8% in hopes of making a dent on poverty. “DBCC…will explore policy options that will boost growth for this year and the next,” Mr. Majuca said in a phone interview.
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By: C. A. C. Valeroso
Source: Business World, Nov. 29, 2011
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