Despite the risks and uncertainties in the global economy, the Philippines recorded a stellar performance for the first three quarters of the year and is seen to further improve for the rest of 2012 until 2013.

The country’s gross domestic product (GDP) expanded by 6.5 percent in the first quarter, 6 percent in the second quarter, and 7.1 percent in the third quarter, averaging 6.5 percent growth for the first nine months of 2012.

GDP is the total market value of all final goods and services produced in a country in a given year.

The National Economic and Development Authority (NEDA) had expressed its confidence that the Philippine economy will most likely surpass the full-year growth assumption of 5 percent to 6 percent for 2012.

NEDA also said that the economy is projected to accelerate by 6.5 percent in 2012 and is much closer to the government’s target of 7 percent to 8 percent annual real GDP growth set out in the Philippine Development Plan for 2011-2016.

It added that the Philippines’ recent economic growth is especially remarkable because it is higher than any member of the Association of Southeast Asian Nations.

By 2013, NEDA is targeting a much higher GDP growth of 6 percent to 7 percent, which will be supported by strong macroeconomic fundamentals.

It is also hoping to see a more vibrant industry sector and improved manufacturing sector buoyed by the semiconductor and electronics industry.

NEDA said that services such as information technology-business process outsourcing industry, tourism, financial intermediation, and trade were seen to fuel growth.

WB upgrades projection

The World Bank is also seeing a much-improved economy for the Philippines as it lifted its growth forecast for the country this year and in 2013. It said that consumption, remittances and government spending will drive overall growth.

The Washington-based lender said that its baseline growth projection for the country in 2012 is at 6 percent, higher than its recent projection of 4.2 percent.

For 2013, the bank projected that the Philippine economy will expand by 6.2 percent from its previous estimate of 5 percent.

“For the Philippines, a window of opportunity exists today to accelerate reforms that become a platform for more inclusive and higher growth,” the World Bank added.

The lender said that the country is benefiting from strong macroeconomic fundamentals, political stability, and a popular government that is seen by many as committed to improving the lives of the people.

Good news supports growth

A local think tank also projected a further acceleration in the growth pace of the Philippine in 2012 and 2013.

According to First Metro Investment Corp. and the University of Asia and the Pacific, strong macroeconomic fundamentals and positive news about the Philippine economy pushed analysts to upgrade their respective economic forecasts for the current year and 2013.

“The financial markets reacted positively and analysts are back to their models to reflect a new growth picture for 2013 which will defy the gravitational pull of the global economy burdened by an intractable recession in the Eurozone,” the think tank noted.

It stated that the flurry of confidence-boosting news were the expansion of the Philippine GDP in the third quarter of the year to 7.1 percent, which brought year-to-date growth to 6.5 percent next to China; the deceleration of inflation to 3.1 percent in October; the fiscal deficit for October, which recorded P9.7 billion; and exports acceleration to a 22.8 percent jump in September, the fastest pace since December 2010.

The think tank said that although faced by a higher base in the fourth quarter of 2011, this year’s fourth quarter should be at least as good as the first quarter to third quarter average GDP growth of 6.5 percent, since infrastructure spending is going full blast, especially with the May elections in sight.

“With the PH economy bucking the trends abroad, supporting our constructive view since the beginning of the year, we are also more sanguine about the near-term and 2013,” it added.

Essential to regional growth

The Asian Development Bank (ADB) had cited the Philippine economic growth as one of the reasons why the Association of Southeast Asian Nations (Asean 5) was considered as the fastest growing region in the world.

ADB lifted its growth forecast this year for the top five Asean economies such as the Philippines, Indonesia, Malaysia, Thailand and Vietnam, or the Asean 5

The Manila-based lender said that from a 5.6-percent projected growth, Asean 5 will continue to grow 5.9 percent this year and 5.8 percent in 2013, citing the strong third quarter performance of the Philippines and Malaysia.

“Surprisingly, Southeast Asia’s economic growth has been slightly upgraded for 2012 due to stronger-than expected results through the third quarter of the year in Malaysia and the Philippines,” it added.

original source: www.manilatimes.net