Philippines’ GDP growth at 7.2% in 2013
The Philippines’ full year Gross Domestic Product (GDP) in 2013 grew by 7.2 percent, higher than the government’s expectations of 6 percent to 7 percent and despite several challenges that strained the economy last year.
Socioeconomic Planning Secretary Arsenio Balicasan on Thursday announced that the increase was fueled by the industry and service sectors, service exports, and other services in education, health and social work.
In a televised press conference at the Philippine Statistics Authority in Makati City, Balicasan said the economy grew by 6.5 percent in the fourth quarter of 2013, which makes the Philippines as one of the best performing economies in the Asian region in the said period, second to China with 7.7 percent growth.
Balicasan, who is also director-general of the National Economic and Development Authority (NEDA), admitted that the man-made and natural calamities that successively struck the country last year have affected the full year growth, but stressed that economy remains strong throughout the year.
“Indeed, growth could have been better, had we not been perturbed by various disasters that hit the country such as the Bohol earthquake, the Zamboanga siege and super typhoon Yolanda,” he said.
Yolanda caused multi-billion-peso damage to infrastructure and agriculture in the Visayas, effectively paralyzing the region’s economic activity.
Balicasan reported that agriculture only represents 0.1 percentage point in the real GDP. This could be due to the effects of the destructive typhoons last year which have severely affected the agricultural supply in Visayas.
The typhoons are also seen as the main reason for the lower growth in household spending at 5.6 percent during the fourth quarter last year as the natural calamities caused “supply shocks” that resulted in higher consumer prices.
Balicasan expects the agriculture and industry sectors to be “vibrant” this year if the two work closer.
Meanwhile, services sector has contributed to 3.6 percent of the real GDP growth in the last quarter of 2013, followed by the industry sector with 2.8 percent. The sectors of manufacturing, trade, finance, and real estate have also helped drive the supply side of the economy, Balicasan added.
The strong demand for communications, land and air transportation, drove a 6.5 percent growth in services sector. The need for storage and services incidental to transport also contributed to the growth.
“Increased air traffic in Q4 2013 was due to the additional flights and destinations of the country’s leading airlines, and number of passengers and cargo for tourism and for relief operations after super typhoon Yolanda,” he said.
Balicasan noted that construction sector had the biggest setback in the fourth quarter, with only 0.8 percent growth due to stricter rules imposed on real estate lending.
“Overall, however, the fourth quarter and full-year 2013 real GDP growth has surpassed the expectations of both the public and private sectors,” he said.
Balicasan said the government is optimistic that the Philippine economy will remain strong in 2014 especially that the outlook on the global economy is becoming more favorable and as the domestic economy remains robust.
He said the the International Monetary Fund and the World Bank have higher growth expectations for the global economy in the coming year, with IMF seeing global activity growing by 3.7 percent in 2014 and 3.9 percent in 2015.
Moreover, the World Bank projects the growth at 3.2 percent in 2014 and 3.4 percent in 2015.