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«AgroInvest» — News — Philippines posts record economic growth

Philippines posts record economic growth

2011-01-31 16:47:37

The Philippine economy grew at its fastest pace last year since democracy was restored more than two decades ago, expanding 7.3 per cent on the back of a global upswing, the government said Monday.

The growth is a boost for President Benigno Aquino's new government as it seeks to attract more foreign investment and enable the long underperforming economy to catch up with its fast-developing Asian neighbours, analysts said.

The National Statistical Coordination Board said one main reason for the strong performance -- coming off growth of just 0.9 per cent in 2009 -- was the rest of the world recovering from the global financial crisis.

"The global economic recovery which resulted in record growth rates of foreign trade... contributed to an economic performance in 2010 that well surpassed the government's target of 5.0 per cent to 6.0 per cent," it said.

Extra money that was pumped into the economy as politicians campaigned for national elections in the middle of the year, as well as higher remittances from the millions of Filipinos working abroad, also helped, the board said.

The 7.3 per cent full-year GDP expansion was the highest since at least 1986, when Ferdinand Marcos was toppled in a peaceful revolution, according to the board.

It did not give economic growth figures prior to 1986, before which different growth measures were used.

The strong growth last year came during a period of peaceful political transition for the Philippines, as Aquino easily won the presidential elections in May and succeeded Gloria Arroyo as the nation's leader.

John Forbes, an investment advisor with the local American Chamber of Commerce, said the promise of further political stability during Aquino's six-year term offered hope for a sustained period of strong growth.

He cited Aquino's anti-corruption campaign, social welfare spending and multi-billion-dollar infrastructure upgrade plans as other reasons to believe the Philippines could finally start to match its dynamic Asian neighbours.

"The Philippines is an economy in the world's fastest-growing region and it is surrounded by economies that have grown at very high rates for a very long period of time," Forbes told AFP.

He said average GDP growth for the Philippines had been below 5.0 per cent for the past decade.

"What this figure (2010 GDP growth) demonstrates is the potential of the Philippine economy to grow almost twice as fast (as 5.0 per cent)," he said.

The government said it was aiming for growth of seven to eight per cent this year, but just as importantly seeking to narrow the devastating rich-poor divide that widened during Arroyo's nearly decade in power.

"Sustaining high levels of growth remain an important aspect in the goal of reducing poverty in the country," Economic Planning Minister Cayetano Paderanga said.

Manuel Aquino, a researcher at the national parliament's policy and budget research department, said he was forecasting growth of just 5.1 per cent this year with consumer spending expected to drop from last year.

But he said higher growth was possible in future years, noting a dramatic build-up in factory equipment investment that would eventually translate into stronger GDP numbers.

"That will lead to, and enhance, long-term productivity," he told AFP.

channelnewsasia.com