Senate think tank paints rosy PHL economy

The Senate Economic Planning Office painted a rosy picture of the economy this year on strong consumer demand higher public spending.   The Senate think tank noted the gross domestic product (GDP) will grow between 5 and 6 percent this year, from 3.7 percent last year.    “Outlook for 2012 is relatively sanguine with the government hinging its optimism on robust consumer demand and a more vigorous public spending,” according to the SEPO Economic Report for March.   Consumer spending will be sustained by “favorable inflation outlook” and overseas Filipino workers’ remittances, with preparations for the 2013 mid-term elections supporting consumer demand, the report noted.   “Tourism is also seen to be an important source of growth this year,” the report said.   “Public spending is seen to be fast-tracked in 2012, from “housekeeping” task in 2011 which included setting up for PPP (public-private partnership) funding and budget streamlining,” the report read.   The Department of Budget and Management announced that 91.3 percent or P869 billion of the year’s total budget has been released.    Sixteen PPP projects are expected to be in the pipeline this year, with an estimated cost of P140.8 billion. Government counterpart funds are estimated at P19.6 billion.   Last December, Ayala Corporation and its partner Genitsa of Spain bagged the Daang Hari-South Luzon Expressway (SLEX) Connector project under the PPP built-operate-transfer scheme. The project cost is estimated at P1.956 billion.   “The government is particularly bullish on having higher investments in 2012 as investment pledges registered with the Philippine Economic Zone Authority surged by 47 percent in the first two months of the year,” according to SEPO.   However, the Senate think tank noted the Aquino government has yet to reach its Philippine Development Plan target of 7 to 8 percent in GDP growth.   “One must note though that even if the government meets its 5-6 percent forecast for 2012, it will still miss, for the second year in a row, the 7-8 percent annual growth it has envisioned in its Philippine Development Plan 2011-2016,” the report read.   SEPO claimed that economic activity may still be “slow and uncertain” due to “external risks,” including the economic turmoil in Europe, high debt levels and deficits in the United States and Japan, and volatility in world oil prices due to tensions in the Middle East.   Internal risks like “adverse weather conditions” continue to pose threats in the agriculture sector that can translate to higher food prices, according to SEPO.   Still, the think tank is keeping its hopes high.   “Notwithstanding the challenges mentioned, the Philippines may still be able to avert a slowdown in 2012… In this regard, social safety nets and infrastructure programs must be prioritized to ensure long-term growth. In this light, gaining ample fiscal space is critical,” it said. —With Rouchelle Dinglasan/VS, GMA News