MANILA, Philippines - The economy grew by only 3.7 percent last year, below the lower end of the revised target range of 4.5 percent to 5.5 percent for 2011, the National Statistical Coordination Board (NSCB) reported yesterday.
The lackluster growth is much slower than the 7.6-percent gross domestic product (GDP) expansion recorded in 2010, NSCB secretary general Romulo Virola said.
Officials blamed the crisis in the United States and in the euro zone, saying this affected export revenues.
By sector, the agriculture, hunting, fisheries and forestry grew by 2.6 percent last year from a contraction of 0.2 percent in 2010 while industry grew by 1.9 percent from 11.6 percent in 2010. Similarly, the services sector grew by five percent from 7.2 percent in 2010.
Nevertheless, Virola said the economy managed to grow by 3.7 percent in the fourth quarter of last year, also slower than the 6.1 percent recorded a year ago but better than the revised 3.6- percent growth recorded in the third quarter of last year.
“The catch up government spending in the last quarter and the resilience of the services sector helped cushion the impact of the slowdown in the euro zone, the creeping economic recovery of the US and the typhoons toward the end of the year as GDP grew by 3.7 percent in the fourth quarter from 6.1 percent in the same quarter last year,” Virola said.
Socioeconomic Planning Secretary Cayetano Paderanga Jr. said the earthquake that hit Japan as well as the typhoons that struck the country in the latter part of last year also dampened exports.
“As in the previous quarters of this year, the economic performance in the fourth quarter was greatly affected by negative external developments, including the European debt and economic woes, the weak recovery of the US economy and the supply chain disruptions due to the flooding in Thailand,” Paderanga said.
Paderanga said that in the fourth quarter of last year alone, overall exports of goods contracted by 10.8 percent. This, he, said, led to a 5.5-percent contraction in total goods and services exports, the latter comprising almost 50 percent of GDP.
Estimates by the NEDA showed that if there was no slowdown in exports, if the government spent enough on public construction and if external conditions were better, the economy would have grown by 7.1 percent.
“GDP growth decompositions would reveal that the dismal performance of goods exports pulled down the full year 2011 GDP growth rate by 2.2 percentage points, while public construction pulled it down by 0.7 percentage point and government consumption expenditure pulled it down by 0.1 percentage point,” Paderanga said.
In a separate interview, NEDA assistant director-general Rupert Majuca said the impact of the typhoons dragged growth by 0.4 percentage point while that of government consumption accounted for 0.1 percentage point.
For 2012, Paderanga expressed optimism the government would meet its economic growth target of five percent to six percent as state spending accelerates.
“We expect that this acceleration of public expenditures will continue well into 2012 and beyond. The hard work of reforming government processes and plugging expenditure leaks has been done,” Paderanga said.
He said public construction would be a major driver of growth for 2012.
“As of January 12, 2012, the government has already released 72.1 percent or P150.2 billion of the P208.3 billion allocation for capital outlays for various infrastructure projects,” Paderanga said.