NEDA sees 5.7-6.3% GDP growth

The government sees bright growth prospects for 2006 as economic figures in 2005 indicate that the Philippine economy is in good shape, the National Economic and Development Authority (NEDA) said.

At a recent briefing for the Senate committee on economic affairs, NEDA National Planning and Policy Staff (NPPS) director Dennis Arroyo said the government expects the country’s gross domestic product (GDP) to grow within the range of 5.7 to 6.3 percent with the agriculture sector growing at four percent, industry at 5.1 percent, and services at 6.7 percent.

"The growth prospects for 2006 take into account the Development Budget Coordination Committee (DBCC) macroeconomic assumptions," he pointed out.

These are: 55 to 57 peso to dollar exchange rate; $56 to $60 per barrel Dubai crude oil price; eight to 8.5 percent inflation rate; 7.5 to 8.5 percent 91-day Treasury bill rate; and gross international reserves of $18.6 billion in 2006.

Arroyo said agriculture is expected to grow four percent in 2006 with higher area harvested and yield hectare. "The Bureau of Agricultural Statistics expects palay and corn to post robust growth of 5.9 percent and 33 percent for the first semester, respectively," he said.

"Strong external demand of high value crops like banana, coconut, pineapple, mango, coffee, and abaca will help push the sector’s performance up," he added.

The country started shipping pineapples to Australia in September 2005 after complying with the Australian Quarantine Regulations. While the country received higher US sugar quota in October last year, banana and pineapple plantations are expanding in Mindanao.

The price of sugar in the world market, according to Arroyo, is also expected to rise on ethanol demand and as Europe holds back sugar production.

The fishery sector is also hoped to sustain its six percent expansion given the bright outlook of the Bureau of Fisheries of Aquatic Resources (BFAR) especially on aquaculture due to good weather conditions and strong demand for seaweeds.

Arroyo added that the industry sector is expected to grow 5.1 percent. "The growth driver in this area is the upbeat interest in mining with the resumption of Lepanto Mines; resumption of the Rapu-Rapu project under new management; and operation of new mining projects namely the Canatuan gold project, Teresa gold project, Pacdal mining project, and direct state utilization project in Diwalwal," he said.

Moreover, the NPPS director said prospects for mining are high. Geological estimates showed that 30 percent of the country’s total land area is a potential metallic mineral zone, with mining permits presently covering only 1.4 percent.