‘Investment-led,’ GMA says of RP’s growth

TORONTO, Canada (via PLDT) — President Arroyo said yesterday that the better-than-expected 3.4-percent growth of the Philippine economy last year was "investment-led" from the first semester’s consumption-led growth.

The President announced this during the luncheon reception hosted in her honor by the Empire Club of Canada and the Canadian Club of Toronto at the Fairmont Royal York Hotel here.

She cited "even the less complimentary" Salomon Smith Barney, in its January-February 2002 credit research, said that the economic growth in the Philippines "has been resilient largely thanks to strong personnel consumption and some well-performing agriculture and service sectors."

However, she noted, this assessment was based by Salomon on the country’s first semester growth which was consumption-led.

"I think it (Salomon) would be even more upbeat now that it is clear that our full-year growth was investment-led, with domestic capital formation rising 4.3-percent amidst a world where there is dis-investment in many economies," President Arroyo said.

The President said she prides her administration in being able to post 3.7-percent GNP growth for the year 2001 even as she took office in Jan. 20 when the global economic slowdown was already evident and later worsened by the Sept. 11 terrorist attacks in the United States.

For the whole of 2001, she cited, the country’s agriculture sector which grew by 3.9 percent; service sectors with telecommunications posting a 20.5-percent growth, and 7.9-percent growth in business services, including IT services.

The President cited even leading international credit rating agencies and multilateral bodies such as the Japan Bank of International of Cooperation (JBIC), the World Bank and the Asian Development Bank which have endorsed the "enhanced" credit worthiness of the Philippines one year after she took office in Malacañang.

Mrs. Arroyo also noted with satisfaction the J.P. Morgan report that the prevailing decline in risk aversion has allowed the continuous improvement in economic fundamentals in the Philippines to finally shine through.

"Increasing risk appetite in 2002 should favor the Philippines among Asian sovereigns," the President quoted the Salomon report.

President Arroyo said she expects the Philippines’ rating "to stay on the balance" for the year 2002 despite the "daunting" challenges ahead.