NEDA: Q3 GDP likely grew by 6.7%-7.7%

(Updated 5:32 p.m.) The country's gross domestic product likely grew between 6.7 percent and 7.7 percent in the third quarter, with the full-year outlook at 7 percent, the National Economic and Development Authority (NEDA) said Tuesday. The global economic recovery, consumer and business confidence, as well as benign inflation softened the El Niño phenomenon’s impact on domestic output, NEDA said. "The continued global economic recovery, low inflation environment, and improvement in consumer and business confidence were seen to have influenced the country’s economic growth," NEDA Deputy Director General Margarita Songco said in a press conference. “GDP growth, however, could have been limited by the negative impact of the prolonged El Niño phenomenon on the agriculture sector," Songco added. The economy as measured by the gross domestic product or GDP grew by 0.8 percent in the third quarter of 2009. The third quarter 2010 GDP, or the value of goods and services a country produced within a specific period of time, was fuelled by the industry and services sector with initial reports from the Department of Agriculture (DA) saying the sector likely contracted by 5.7 percent. “The industry sector is expected to be the main growth driver in the third quarter, considering that the strong external and domestic demand continued to fuel the manufacturing, construction, and mining and quarrying subsectors," said Songco. “The services sector, benefiting from a low inflation environment, may also have contributed significantly to GDP growth in the previous quarter. The trade, private services, transportation, communication and storage subsectors possibly supported growth in the services sector," she added. The economy grew by 7.9 percent in January-June, from 1.2 percent in the year earlier period, after expanding 7.9 percent in the second quarter from 7.8 percent in the first three months. Economic managers that make up the Development Budget Coordination Committee (DBCC) expect the GDP to expand between 5 percent and 6 percent this year. But because the economy performed better than expected in the first half, there is a strong likelihood that the GDP would exceed that forecast, Songco said. “It’s higher than 6 percent which is the higher end of the target of 5 percent to 6 percent. It will be above 7 percent for the whole year. We still have to wait for the fourth quarter," she added. Several factors are having a positive impact on the economy, including money transfers by overseas Filipino workers, strong corporate earnings, and better merchandise exports and imports, the NEDA official said. Still, Finance Secretary Cesar Purisima told reporters the DBCC would keep its 2010 forecast unchanged. “The approach is to have a conservative plan. The global economic environment is volatile and there is no clear direction," he said. To pump-prime the economy, the government will bid out at least 10 infrastructure projects under the Aquino administration’s public-private partnership (PPP) initiative, Purisima said. For 2011, the government expects the GDP to grow at a slower pace with the slowdown in Asia Pacific as global exports and imports drop. Purisima said a conservative GDP growth forecast of 5 percent is just about right for 2011. “If we achieve a GDP growth of 5 percent next year we will be happy. But if we achieve higher than that, we will be happier," the finance chief added. — VS, GMANEws.TV