MANILA, Philippines — The Philippine economy is expected to sustain its growth momentum in 2012 as the government would accelerate public expenditures and pursue programs and projects designed to improve resiliency to typhoons and disasters.

While the government is optimistic that 2012 would be significantly better than 2011, the National Economic Development Authority (NEDA) remains vigilant and continues to closely monitor external developments that pose risk to the country’s growth.

“We will continue our efforts to diversify our exports base, both in terms of products and countries. The government is prepared to hurdle further challenges with the support of all sectors,” says Socio-economic Planning Secretary Cayetano Paderanga, Jr.

“Government agencies are working closely in crafting innovative strategies, not only by ensuring the rapid acceleration of government spending, but also through the implementation of the appropriate policies as spelled out in the Philippine Development Plan 2011-2016, in order to steer our country towards the path of inclusive growth.”

“The hard work of reforming government processes and plugging expenditure leaks has been done. We can now spend every taxpayer peso with full efficiency and high impact on the economy,” says Paderanga.

The government would also step up the disbursements including those for infrastructure and capital outlay in the coming months.

Strong investments are expected to post a strong growth in 2012 despite the global economic uncertainties.

Public construction would significantly contribute to growth in 2012 as 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 of different agencies like Department of Public Works and Highways, Department of Education and Department of Agriculture.

The construction sector would get a boost from public construction this year due to continued spending for the government’s disbursement acceleration program’s projects that were carried over from the previous year, and from the faster budget execution process of government.

Construction will also get a boost from the acceleration of the implementation of the private-public partnership program this year.

Private construction will remain robust, particularly in the property sector, given the upward momentum in the office sector, and the relatively high BPO office demand in strategic areas across the country.

“We also expect the residential sector to remain supported by the demand from families of overseas Filipinos and expansion of investments in energy; mining; low-cost housing and office buildings; and the industries in the priority areas – agribusiness, consumer durables, information technology (IT), health and wellness, transport, telecommunications, and especially tourism to contribute positively to the country’s economic growth in 2012.”

The performance of the real estate sector will be complemented by the continued robust performance of the business process outsourcing industries.

The other services sector would benefit from the surge in tourism as the government would further improve infrastructure, intensify tourism marketing campaigns, and maintain a favorable peace and order situation.

Stronger consumer demand would drive food manufacturing spurred by government spending, softening prices of raw materials, and better weather conditions.

Sec. Paderanga expects that in the second half of 2012, the manufacturing sector would post a remarkable growth as the food sector further expands. Election spending provides an impetus up to the national and local elections in 2013, and the electronic industry registers higher growth.

The resilient domestic economy would support to the continued expansion in household consumption expenditure. Household consumption will be spurred by the continued tripartite efforts of the government, private employers and workers to improve the country’s labor and employment situation; a sustained inflow of overseas Filipinos remittances which has been counter-cyclical in the past; and the implementation of social protection programs.

As many analysts expect, global economic recovery might stall in 2012 mainly due to the growing concerns over Europe. The International Monetary Fund projects the Euro area will suffer a mild recession due to lingering concerns on how to appropriately and quickly restore confidence in the economy in order to support growth while at the same time addressing fiscal imbalance and providing more liquidity and monetary accommodation.

“We are also watching closely developments in the US economy, whether the recovery will gain momentum or will remain fragile. Likewise, we recognize the risk that China could slow down or even experience a ‘hard landing,’ so we are closely monitoring the overall global situation,” says Sec. Paderanga.

The full year 2011 real gross domestic product (GDP) growth of 3.7 percent was within NEDA’s growth forecast of 3.6 to 4.0 percent. However, this is below the Development Budget Coordination Committee (DBCC) growth forecast of 4.5 to 5.5 percent.

Paderanga says a myriad of external shocks has buffeted the economy since the beginning of 2011, starting from the Middle East and North African crisis and the resulting high oil prices, the Japan and Thailand tragedies with their resulting supply chain disruptions, and the overall weakness of the world economy due in large part to the weaknesses in the European and US economies.

Several typhoons, flooding, and low pressure areas affected agriculture and infrastructure in 2011. NEDA has estimated that the damages caused by these natural disasters represent 0.63% of GDP.

GDP growth decomposition reveals that the dismal performance of goods exports pulled down the 2011 GDP growth rate by 2.2 percentage points. Public construction and government consumption also had an impact.

Agriculture, industry and services sectors contributed to the full year growth last year.