RP economy sees fastest growth in almost 20 years

MANILA — The country’s economy grew at its fastest rate in nearly 20 years in the three months to March, expanding 6.9 percent from a year earlier with the services sector leading the jump.

“The Philippines is on a roll,” President Gloria Arroyo said in a statement issued from Australia, where she is on a state visit.

“We have just received the report of our first quarter performance and we’re happy to say that the Philippines grew 6.9 percent in the first quarter of 2007. This is the fastest in almost two decades.”

She said the services sector grew 9.1 percent, industry 5.3 percent and agriculture 4.2 percent.

Analysts applauded the figures which were better than forecasts and supported by low interest rates and a strengthening local currency.

“It exceeded expectations, with all the sectors, especially the services and industrial sectors, performing quite well,” said Banco de Oro Universal Bank strategist Jonathan Ravelas.

“Low interest rates along with the strong peso provided a very good business environment, particularly for the industrial sector, while imports of goods used in manufacturing became cheaper,” he said, referring to gains in the peso.

Ravelas said it was likely that the economy would sustain growth rates for the remaining quarters of this year, especially if the government continued its pump-priming.

“The peso should stay strong and if the weather is favorable, agriculture, which accounts for a fifth of the economy, should also continue to grow,” Ravelas said.

The economy grew 5.4 percent in 2006. The first quarter grew 5.7 percent and the final quarter by 5.5 percent amid sharp increases in trade, manufacturing, agriculture, transportation, public services and exports.

Socio-economic Planning Secretary Romulo Neri told a briefing first quarter figures surpassed government forecasts of 5.3 to 6.1 percent growth.

Neri attributed the performance to “the government’s determined reforms to hike revenues, manage expenditures effectively, contain the deficit and tame inflation.

“The easing pressures on interest rates, the record levels of overseas remittances and the robust export earnings have all resulted in improvements in the country’s outlook,” he added.

Neri said the latest figures put the country’s target of 6.1 percent growth for the whole of 2007 within reach with construction, mining and business process outsourcing all expected to pick up.

Romulo Virola, secretary-general of the National Statistic Coordination Board, added GDP growth in the first quarter of 2007 was “the country’s highest since the first quarter of 1990.” (AFP)