The government remains confident that the Philippine economy will recover in the remaining quarters of 2014 following the slower-than-expected 5.7 percent growth it recorded in the first quarter of the year.
On the sidelines of the 1st EU-Philippines Business Dialogue held in Makati City on Wednesday, Socioeconomic Planning Secretary Arsenio Balisacan expressed his confidence that the economy can grow as much as 6.8 percent in each of the remaining three quarters of the year to achieve at least the lower end of the full-year growth target of 6.5 percent to 7.5 percent.
“Our country has grown faster than that before. Why not? Especially as we get our recovery [and]reconstruaction efforts going on stream, all these projects coming in, and the private sector [is]quite aggressive,” Balisacan said to reporters.
Balisacan, who is also the National Economic and Development Authority (NEDA) Director General, noted that the lingering effects of Super Typhoon Yolanda on the economy, particularly in the supply chains of goods, are slowly settling down.
The NEDA chief explained that the impact of the natural calamity went beyond the affected areas through supply chain disruptions, wherein the movement of goods to typhoon-affected areas created temporary shortages in other parts of the country.
Balisacan also foresees construction and manufacturing as the main growth drivers for the remainder of the year.
“What will happen now is, even though capital bases of Yolanda-affected areas are now lower because of the destruction of assets, the reconstruction and rehabilitation will support the growth. Reconstruction and rehabilitation in the next three quarters should offset the lower growth in the first quarter,” he said.
Manufacturing continues to grow at a higher rate than the average for the country, although it was lower in the first quarter than in the first quarter of 2013, Balisacan said.
Balisacan explained that the government remains focused on the revival of the manufacturing sector given its potential for innovation, value adding, and backward linkage with the agriculture sector, the main source of livelihood for the poor.
“At the same time, we continue to support priority sectors that contribute positively to quality employment and increased productivity,” he added.