PHL economy grows 6.5% in Q4 despite calamities

(Updated 8:38 p.m.) Despite enduring a series of natural calamities in the later part of 2013, the economy managed to grow at a decent pace in the fourth quarter, with the full-year number also beating the government's target.  
 
The Philippine Statistics Authority (PSA) on Thursday reported that the gross domestic product (GDP) grew by 6.5 percent in October to December, compared with the revised 6.9 percent in the third quarter.
 
The latest GDP number placed the full-year 2013 output growing by 7.2 percent – still above government's growth goal of 6 to 7 percent and the fastest since 7.7 percent was recorded in 2009.
 
The Philippine economy grew by 6.8 percent in 2012.
 
The main drivers in the fourth quarter were services and manufacturing, National Statistician Carmelita Ericta told reporters at a briefing.  
 
As expected, killer Typhoon Yolanda, the strongest to hit land on record, curbed growth in the fourth quarter. The super typhoon barreled through Central Philippines on Nov. 8, cutting a wide swath of destruction and killing at least 6,200 people.
 
Growth "could have been higher" at around 7 to 7.3 percent if not for the typhoon, Socioeconomic Planning Secretary Arsenio Balisacan said at the same briefing.
 
Still, there is a general sense of satisfaction from the government.
 
"Overall, the fourth quarter and full-year growth has surpassed the expectations of both the public and private sectors," noted Balisacan, who is also National Economic and Development Authority (NEDA) Director General.
 
Manufacturing grew by 12.3 percent in the fourth quarter, while services expanded by 6.5 percent in the period, PSA data showed. Agriculture coughed up 1.1 percent.
 
In a telephone interview Thursday, Bank of the Philippine Islands economist Nicholas Antonio Mapa noted that Eastern Visayas – the region hardest hit by Typhoon Yolanda – only accounts for around 2 percent of total GDP.

"As long as NCR [National Capital Region] and CALABARZON [Cavite, Laguna, Batangas, Rizal and Quezon provinces] grow, the economy will grow," he said.

Balisacan noted the economy "will remain strong in 2014," saying the improving prospects for the global economy could provide a springboard for a recovery in exports.
 
But risks from the volatility in financial markets as the US Federal Reserve continued to unwind its bond purchases, he added.
 
The government targets GDP growth of 6.5 to 7.5 percent this year.
 
Balisacan maintained that the country has "strong fundamentals," with the government does not expect acceleration of inflation and sharp depreciation of peso.
 
"We are carefully monitoring the situation," he said of the volatility in fanatical markets.
 
While agreeing that domestic fundamentals remain healthy, Mapa questions the sustainability of growth.

"A lot of our growth is still on services and the spike in manufacturing is on chemicals which are not labor-intensive. Hopefully, we continue to grow other sectors of manufacturing in order to make growth inclusive," he said.

The Socioeconomic Planning Secretary acknowledged that strong growth was still not enough to put a dent on poverty.
 
But the government "continues to implement reforms to attract more investments and create jobs," Balisacan said.
 
"Manufacturing is still a relatively small part of the economy. We are trying to get that part grow fast to create more jobs," he noted.

In a statement, Finance Secretary Cesar Purisima said, "A key priority is improving the Philippines' ease of doing business index to ASEAN levels in order to ensure a productive and conducive investment climate." – With Rouchelle Dinglasan/RSJ/VS/BM, GMA News