"Agriculture" to provide momentum for economy in Q4

Agriculture will provide the economic momentum for the fourth and final quarter of the year, the National Economic and Development Authority (NEDA) said, adding that the economy could easily hit the expected 3.7-percent growth in the remaining four months.

NEDA Director General Dante Canlas told reporters that the main harvest of palay and other agricultural crops would be in the fourth quarter, historically the busiest quarter in the sector.

According to Canlas, the Department of Agriculture is projecting a bumper harvest for rice after contracting by 0.3 percent in the third quarter. In the third quarter, the agriculture sector as a whole grew by only two percent this year compared to 5.9 percent last year — a dismal performance precipitated by bad weather that affected the agricultural areas.

However, Canlas said the services sector would also contribute significantly to the fourth quarter growth especially since the holiday season is already underway.

Increased consumer spending has been a boost to both the agriculture and services sector as people are spending more on food and services, notably in the increased utilization of telecommunication services fueled by the perennial popularity of mobile telecommunication.

According to Canlas, the Sept. 11 bombing of the World Trade Center in the US would not have an immediate impact on the domestic economy, at least not in the scale originally anticipated.

"We’ll continue to monitor exports since it is most vulnerable to disruptions in our major export markets," Canlas said. "But it is still very difficult to quantify the overall impact of the Sept. 11 event."

For the whole year, NEDA had projected economic growth rate to reach 3.3 percent, even in the aftermath of the US-Afghanistan war.

"Provided the recession in the US does not deepen and drag with it the rest of the world’s economies, the Philippiness is on track to meet the government’s forecast of 3.3 percent in GDP for 2001," Canlas said.

Canlas admitted that the whole-year forecast would require a 3.7-percent growth in the fourth quarter but he expressed optimism that despite the risk and uncertainty stemming from the US-Afghanistan war, the elements needed for a strong fourth quarter performance is present.

"These include declining domestic interest and inflation rates, decrease in the world price of crude oil and the concerted moves by the developed countries to cut interest rates and avert global recession," Canlas pointed out.