By Mayvelin U. Caraballo Reporter
The Philippine economy as measured by gross domestic product may grow close to 6 percent in the first quarter of the year, an economist said over the weekend.
“Expectations are that this year, growth will be at least 6 percent . . . because of election spending and investments,” ING economist Joey Cuyegkeng said during the 2013 Economic Journalist Association of the Philippines Business Journalism Seminar at Clark Pampanga presented by San Miguel Corp.
The government announced that the first-quarter 2013 national accounts will be released on May 30.
However, Cuyegkeng noted that the projected growth—which will be released on May 30—may be lower than the 6.6-percent expansion last year because some of the growth indicators in the first quarter are on the downtrend.
He cited the exports as one of the factors after posting an almost flat growth at 0.1 percent in March, and performing negatively for two consecutive months.
The ING economist continued that government spending also shows signs of slackening.
The Department of Budget and Management earlier said that, spending for February stood at P124.1 billion—14.3 percent higher than expenditure levels posted in the same period in 2012—exceeding the 11 percent year-on-year spending jump posted earlier in January.
On the other hand, Cuyegkeng also lauded the recent investment upgrades that the country achieved from credit rating agencies such Fitch and Standard and Poor’s.
In addition, he said that the Philippines could expect another investment grade rating within three to 12 months, however, the country needs to address certain challenges on the economy.
Such challenges the government must focus on are its dependence of the economy on services, expanding trade deficit, and low revenue collections.
“Services continue to be the pillar of growth of the economy,” Cuyegkeng noted, adding that, there has to be other sources of growth in the economy to sustain the 6-percent growth, such as the improvement of the industry sector.
Meanwhile, he also projected that the trade deficit between 2013 and next year is seen to reach $12 billion to $16 billion. The economist added that, another factor for a sustained strong economic growth is reducing poverty, unemployment and underemployment.
Latest statistics showed that the proportion of poor Filipinos remain unchanged in the first semester of 2012, as the poverty incidence for the period was estimated at 27.9 percent. In addition, the number of jobless Filipinos rose as the unemployment rate in January 2013 was estimated at 7.1 percent, higher than 2.8 million jobless persons in October 2012.
Also, underemployment at the start of the year worsened as the number of underemployed persons went up to an estimated 7.93 million, placing the underemployment rate at 20.9 percent.