RP economy grows an average of 4.4% under Arroyo administration — NEDA

March 3, 2010 10:23 pm 

MANILA, March 3 — The Philippine economy has expanded by an average of 4.4 percent during the Arroyo administration, the National Economic and Development Authority (NEDA) said on Wednesday.

In a presentation during the Philippine Economic Briefing in Makati City, NEDA Deputy Director General Margarita Songco said the modest annual growth from 2001 to 2009 was driven primarily by the expansion in the services sector.

"Deregulation in air transport and communications, massive infrastructure programs, reforms in the financial sector and the strong inflow of OFW (overseas Filipino workers) remittances have all contributed to the surge in services," Songco said.

The NEDA official cited the following critical policy reforms that paved the way for macroeconomic stability and higher growth during the period:

* The fiscal consolidation program provided the platform for macro stability when the country’s ballooning deficit and accelerating outstanding public sector debt became a growing concern. This helped contain the budget deficit and led to substantial improvement in fiscal position, especially in 2007.

* Inflation targeting facilitated the achievement of price stability that is considered crucial in maintaining a stable economic environment for investors.

* Financial sector reforms and prudent regulation after the Asian financial crisis such as capital build-up and risk management enhancement helped strengthen the country’s banking system.

*Sector-specific reforms contributed to growth in the mining, IT-related businesses, telecommunications, and tourism.

* Infrastructure development helped upgrade the transportation sector in the country and also helped the country avoid the recession. The electrification program energized almost 100 percent of barangays nationwide.

Songco said that the implementation of the Economic Resiliency Plan (ERP) in 2009 helped mitigate the effects of the global financial crisis.

"Infrastructure spending strategies of front-loading, realigning from slow-moving to fast-moving projects, and implementing quick-disbursing projects, paved the way for public-led investment. While private construction notably weakened particularly in the second and third quarters, public construction soared at double-digits," she said.

Moreover, Songco said the implementation of lower corporate tax rates and personal income tax exemptions helped provide relief for firms and families.

The implementation of various strategic social programs under the ERP provided protection to the vulnerable sectors and boosted human capital investments, she added.

Through the Comprehensive Livelihood and Emergency Employment Program or CLEEP, almost 400,000 individuals nationwide were given jobs or livelihood assistance.

"We also expanded the net of social protection for the bottom poor. We greatly increased the coverage for conditional cash transfers. We gave more for self-employment assistance and microfinance lending. We went over target in the Food-for-School program of distributing rice to children and their families," Songco said.

She stressed that attaining the full-year 2009 growth rates for gross domestic product (GDP) and gross national product (GNP) is an encouraging development for the country.

"This positive performance should be taken as an opportunity to further bring the economy to a higher level of growth in 2010 and beyond," Songco said.

In 2009, it grew by only 0.9 percent, or at the lower end of the official target range of 0.8 percent to 1.8 percent. (PNA) scs/DGA/utb

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