Strong GDP growth is result of gov’t and private sector partnership — leaders

CEBU, Philippines - Local business leaders were elated over the 7.1 percent growth of the country’s  Gross Domestic Product in the third quarter of this year and considered it as a positive sign towards clearer reforms and stronger cooperation between the government and the private sector towards sustainable economic development.

Based from the  National Statistical Coordination Board data  released last Wednesday, it showed that the better-than-expected growth of the Philippines was reported to be the highest under the Aquino administration and the fastest in Southeast Asian region.

With its improved third-quarter performance, the Philippines increased its 9-month average growth to 6.5% and hit beyond the official target of the government from 5 to 6%. 

The big rise in GDP growth is attributed to  the expansion of the services sector by 7%, remarkable performances from various sectors such as transport, storage and communication, and real estate and the continuous surge of the business process outsourcing industry and remittances from Overseas Filipino Workers (OFWs). 

Cebu Chamber of Commerce and Industry President Prudencio Gesta said that the higher government spending on infrastructure and improved credit rating of the country also fueled the economic growth.

He added that the strong GDP could be traced to strong domestic consumption attributed by the higher spending power of the population which is mostly generated from OFW remittances and business expansions particularly from BPO/ICT industries.

“We encourage our OFWs to send their money thru legal means to be counted in. As long as the fight against graft and corruption can be sustained and more funds go into our treasury, we can expect higher government spending which can spur more economic activities and thus sustain our good GDP performance,” Gesta stated. 

 Mandaue Chamber of Commerce and Industry President Philip Tan applauded the Aquino administration, saying that the government is on the right track. 

“This is the result when we trust the kind of leaders we have. Keep it up, Mr. President,” he said. 

Rey Calooy, president of the Filipino-Cebuano Business Club, said that higher growth is expected by 2013 due to the projected increase in government spending especially on election period, increase in direct foreign investment due to high business confidence and increase in consumer spending capacity with the influx on OFW remittances.

“The MSME sector is very happy with the 7.1% GDP growth. The Aquino administration is in the Forbes’ best place in Asia to do business,” he added.

He hopes though that local government units would simplify the process in securing business permits so as not to inconvenience businessmen especially the small-scale players.  

Economics professor Fernando Fajardo, who is also executive director of the Cebu Business Club, commended the accelerated growth in agriculture, services and the buoyancy of the industry sector from the production aspect with its 8.1% growth in manufacturing and construction.

Although acknowledging the good efforts of the government, he said that the public sector should still recognize the need for more government expenditure to stimulate further the economy. 

“It’s surprising considering our disappointing performance last year when we grew only by 3.9%. On the demand side, thanks to the government that is now using the budget on time although it is still unnecessarily cutting down the deficit below target. Investment is still very volatile while export is threatened by the receding European Union economies and anemic growth in the United States and Japan,” Fajardo told The FREEMAN. (FREEMAN)