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By Darwin G. Amojelar, Reporter
THE Philippine economy may have grown at a
moderate pace in the second quarter of the year owing to soaring
inflation, the National Economic and Development Authority (NEDA)
said.
“We expect GDP to grow better than 5.2
percent, but not higher than 6 percent in the second quarter,”
Acting Socioeconomic Planning Secretary Augusto B. Santos told
reporters over the weekend.
In the first quarter, GDP (gross domestic
product), which is the amount of goods and services produced
locally, grew by 5.2 percent. For the second quarter last year, the
country’s GDP grew 7.5 percent, boosted by stable interest rates,
a strong peso, a resilient agriculture sector, vibrant industry and
services sectors and election-related spending.
The NEDA’s forecast is in line with the
National Statistical Coordination Board’s composite leading
economic indicator, which rose to 0.566 for the second quarter from
0.455 in the first quarter. The index serves as a basis for
short-term forecasting of macroeconomic activities and involves the
study of the behavior of indicators that consistently move upward or
downward before the actual expansion or contraction of overall
economic activity.
Santos blamed the likely slowdown this year on
galloping inflation caused by higher food and fuel prices.
Last month, consume price increases jumped to a
nine-year high of 9.6 percent.
With the higher-than-expected inflation, the
policy-making Monetary Board was forced to hike its key interest
rates by 25 basis points to 5.25 percent and 7.25 percent for the
overnight borrowing and lending windows, respectively.
The central bank also raised its inflation
forecast to between 7 percent and 9 percent this year, and to
between 4 percent and 6 percent next year. It earlier set a 3
percent to 5 percent inflation target for this year.
The BSP also projected that inflation could
reach 11 percent in June before dropping continuously starting July.
Cabinet officials told to explain inflation
In light of rising inflation, President Gloria
Arroyo ordered her Cabinet to go around the country and explain to
the public the reasons behind rising food and fuel prices.
“A lot of people thought that [the] rise in
prices of oil and rice were caused by local issues. This thing is
global in nature,” Santos told reporters.
He said Cabinet officials will explain the
measures the Arroyo administration is undertaking to lessen the
burden of the “imported inflation.”
Santos said first-quarter inflation rates in
other Asian countries were also on the high side at 7.6 percent in
Indonesia; 4.99 percent, Thailand; 6.59 percent, Singapore; 3.7
percent, South Korea; 5.16 percent, China; 16.4 percent, Vietnam;
and 2.5 percent, Malaysia.
In the Philippines, the first quarter figure
stood at 5.6 percent.
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