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The Philippine economy grew 7.3 percent in 2007, its highest rate in
31 years, officials said Thursday, attributing the record
performance to gains made across all sectors of the economy.
The figure compared with gross domestic product
(GDP) of 5.4 percent in 2006 while gross national product (GNP),
including foreign remittances from abroad, rose 7.8 percent in 2007
from 6.1 percent in the previous year, they said. GDP refers to the
total value of all final good produced in the country within a year.
Acting Secretary Augusto Santos of the National
Economic and Development Authority (NEDA) said the 2007 growth
figure “exceeded market expectations and is so far the strongest
since the economy registered its last peak growth of 8.8 percent in
1976.”
Santos said the government maintained its
forecast that growth would slow to 6.3 percent to 7 percent in 2008
given an expected slowdown in the US.
“What we are saying is that if there is a
recession in the US, then that will affect us, but the situation is
closely being monitored,” he told a press conference.
He noted the US as the country’s main trading
partner and home for thousands of Filipino workers who send money
back to their families, and he also expressed hope that a US
recession could be avoided.
“The continued weakness of the US economy and
the volatile oil prices are clouds on the horizon that pose downside
risks to growth in 2008,” he said.
“As we see it, there may in fact be no
recession in the US given the stimulus package by the Bush
administration.”
Philippine share prices, which had been in
negative territory for most of the day’s trade, were pulled up by
last-minute buying after the announcement of the
better-than-expected growth figures.
The composite index ended up 9.47 points or 0.3
percent at 3,266.00 points with broader sentiment still being held
back by concerns over the US economy.
Economic growth over 2007 was led by a robust
services sector where output grew 8.7 percent. Industrial output
rose 6.6 percent, while farm production was up 5.1 percent.
In the last three months of 2007, the economy
grew 7.4 percent year-on-year, the government added.
“It was slightly higher than what most people
had expected,” Astro del Castillo, director of the Association of
Securities Analysts of the Philippines, told Agence France-Presse.
“What we are worried about now is moving forward.
“The fact that we performed well in 2007 is
good news but 2008 might be a different story given the challenges
we are facing,” he said.
He said the Philippine economy should continue
to grow this year but will be slower than 2007 due to the threat of
a recession in the United States.
“The government should continue to sustain its
fiscal reforms,” he said.
Frederic Neumann, an economist at HSBC in Hong
Kong, said the GDP data was a surprise.
“The country’s economic growth remains very
robust, and it is unlikely to decelerate in the first half.”
“The Philippine government’s proposal for a
P75-billion stimulus package should even add to this year’s growth
and cushion the impact of an economic slowdown in the US,” Neumann
said.
The Philippines has long been the economic
laggard of Asia but in recent years, economic reforms implemented by
President Gloria Arroyo have sharply boosted growth.
Some skeptical
Critics charge growth has not benefited the poor
who form the bulk of the population, but National Statistical
Coordination Board chief Romulo Virola said recent surveys show the
poor are also feeling the effects.
He cited a December 2007 survey by independent
research firm Social Weather Station that found that the number of
Filipinos who considered themselves as poor had fallen to 47
percent, down from 52 percent in September 2007.
Reacting to the administration’s claim that
the 2007 GDP growth was the fastest in 31 years, IBON Foundation
Inc. research head Sonny Africa said there are other records the
Arroyo administration is setting that are more telling of the
economy, according to a press statement.
IBON is an independent development institution
established in 1978 that provides research, education, publications,
information work and advocacy support on socioeconomic issues.
The manufacturing and agriculture sectors,
compared to their share in the GDP are at their smallest in the last
37 years, IBON said. The unemployment rate shows the worst
joblessness of any administration, and the real average family
income is at its lowest over the last 10 years.
“The growth that the administration hypes is
meaningless for millions of Filipinos. It merely reflects the
profits of a few big foreign corporations and their local
partners,” Africa said in the statement.
-- AFP With The Manila Times
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