The figure for gross domestic product (GDP) growth is within the government’s official target of between four to 4.5 percent for the year, Camacho said.
"I think we exceeded everyone’s expectations, including our own," Camacho said. "It’s because of the good performance of services, exports, personal consumption and probably even agriculture," he added.
Most economists had expected that economic growth in 2002 would fall below the government’s target. For this year, GDP is expected to grow by 4.2 percent to 5.2 percent. In 2001, the economy grew 3.2 percent.
Services and exports were consistently strong in 2002, providing the momentum that countered the erratic performance of the agriculture and industry sectors which suffered from the effects of adverse weather and weak market demand.
According to Camacho, exports performed much better than expected, propping up the manufacturing sector to a certain extent.
Although demand from the country’s traditional markets have been weak for the last two years, the export sector was quick to find alternative markets in Asia where much of the slack had been taken up by intra-regional trade.
Camacho said the economy also picked up additional strength from consumer spending which posted a steady increase.
Although government economists said they prefer to see improvements in savings rate, the market’s propensity for spending has provided the short-term cushion for the economy.
Camacho also hinted that the 2002 deficit might not be as bad as projected based on the government’s revised estimates which placed the full-year deficit at P223 billion.
"This year, the deficit will definitely be lower than 2002," Camacho said.
However, Camacho warned that radical steps were necessary to stay afloat, especially in the light of internal and external uncertainties that threaten to derail the country’s economic growth.
"We have to continue to push for structural and market reforms that started during the Aquino administration," Camacho said. These include liberalization and deregulation in telecommunications, banking, insurance, retail, airlines, power and other industries, he added.
Camacho admitted he was not saying anything new, adding that most people already know what the problems were and even some of the solutions. "The real challenge is consistent, persistent and successful implementation of the blueprint for the future."
The National Economic and Development Authority (NEDA) earlier said GDP is projected to grow by 4.6 percent during the fourth quarter of 2002, bringing the full year growth to 4.3 percent due mainly from the strong performance of the agriculture and services sectors.
Newly-appointed economic planning secretary Romulo Neri also claimed that the economy would grow by seven percent by 2005.
"If we don’t do seven percent GDP growth in two to three years, then I will admit failure," Neri said, adding that these growth rates were possible even without pump-priming.
According to Neri, the plan would not have an impact on the country’s already dismal fiscal deficit, saying that it would only take several key policy reforms to jump-start the economy.
"We will try doing it without pump-priming," Neri said. "There are policy changes that we can implement such as airline liberalization, port liberalization and railway development."
Neri admitted however that the Arroyo administration would be going against "entrenched interests" especially in airline and port industries which he said would have to be "de-monopolized."
Neri also said NEDA was reviewing old projects that could be funded out of official development assistance, including the controversial P200-billion Mindanao Railway project which had been mothballed since 1998.
Neri said he had ordered NEDA economists to review all foreign assisted projects with the intention of streamlining them and "accelerating their implementation to mimic pump-priming."