(The Philippine Star) | Updated December 3, 2012
MANILA, Philippines - The Philippine economy posted an unprecedented 7.1-percent growth during the third quarter of this year, so far the highest in the ASEAN, a sign it has become a new tiger economy in Asia, according to Albay Gov. Joey Salceda, a noted economist.
Salceda, a former economic adviser to Philippine presidents, was quoting a news release from Jose Ramon G. Albert, secretary general of the National Statistics Coordination Board (NSCB), saying the “domestic economy accelerated for the third quarter to 7.1 percent this year from the 3.2 percent last year.”
The release said the growth was “beyond expectation” and was “driven by the services sector with the robust performances of transport, storage and communication, financial intermediation, and real estate,” among others.
Salceda, often referred to as the ‘Green Economist‘ who had been a financial analyst before joining politics, said the third quarter “is a defining moment in our economic history and we can truly assert that the Philippines has become a tiger economy of Asia.”
“Overall, our 7.1 percent Q3 gross domestic product growth was the best in the region as compared to Indonesia with 6.2 percent, followed by Malaysia at 5.2 percent, Vietnam at 4.7 percent, Thailand at 3.0 percent and Singapore at 0.3 percent. It is even comparable to China’s 7.7 percent GDP growth in the same period,” he said.
“Interestingly, the country’s robust GDP was achieved despite the 2.2 percent decline in mining,” added Salceda. The governor also sits as president of all regional development councils in the country.
“Having closely followed the behavior of the Philippine economy since 1989, the quality and the complexion of the current trends offer more scope, more scale and more speed in the 2nd half of President Noynoy Aquino’s administration,” he noted.
Analyzing the release, Salceda said the outperformance was driven by services which accounted for 58 percent of total growth, followed by industry with 39 percent. Despite the doubling of agriculture’s growth to 4.1 percent, however, its contribution to the total growth was only three percent.
Based on specific sectors, the strong GDP was driven by construction at +24.3 percent and broad-based growth in the service sectors – transportation/communications at +9 percent, financial intermediation at +8.3 percent, real estate at 7.8 percent and trade at 7.0, percent he said.
Salceda further noted that on the demand side, it is the same old story: low interest rate regime on private demand combined with OFW remittances which allowed the Philippines “to exhibit a mighty drag coefficient against the headwinds of choppy US recovery, slowing China and spreading Eurozone weakness.”
He added, that the task of sustainability largely constitute in maintaining the macroeconomic balance, rapid rollout of infrastructure and reducing the price of electricity to shift into an investment-driven growth.