Socio-economic Planning Secretary Romulo Neri released a statement about an hour ago announcing that the Philippine GDP grew by a robust 6.9 percent in the first quarter, surpassing the forecast of between 5.3 and 6.1 percent. The services sector proved crucial for this growth, growing at 9.1 percent.
Below is Neri’s full statement:
STATEMENT OF SOCIO-ECONOMIC PLANNING SECRETARY ROMULO L. NERI ON THE RELEASE OF THE FIRST QUARTER 2007 NATIONAL INCOME ACCOUNTS
I am pleased to report the economys robust performance in the 1st quarter of 2007. Gross domestic product or GDP grew by 6.9 percent, surpassing NEDAs conservative forecast band of 5.3 to 6.1 percent as well as the 5.7 percent median forecast of Bloombergs survey. Gross National Product or GNP rose by 6.6 percent.
The governments determined reforms to hike revenues, to manage expenditures effectively, to contain the deficit, and to tame inflation are all cascading to benefit the economy. The easing pressure on interest rates, the record levels of overseas remittances, and robust export earnings, have all resulted in improvements in the countrys outlook. This has further attracted foreign portfolio and direct investments, boosting the peso’s strength and buttressing the countrys foreign exchange reserves.
With these developments, the productive sectors of the economy responded positively. Still reeling from the impact of the super typhoons last year, agriculture, fishery and forestry expanded moderately by 4.2 percent, on the back of strong growth in fishery and forestry. Output expansion of crops was more subdued at 2.9 percent, though buoyed by the traditional crops and high value commercial crops. We see that government programs, as well as private sector initiatives to make the sector more stable, are paying off.
The services sector remains the pillar of the economy, expanding at an impressive 9.1 percent with all sub-sectors posting robust growth. Meanwhile, the industry sector remained stable at 5.3 percent. Worth noting are the growth in construction (8.6 percent) and mining (11.0 percent).
Solid macroeconomic fundamentals and renewed confidence put the 6.1 percent GDP growth forecast for this year well within reach. Let us not be distracted again but let us build on the momentum we now have. Hence, the government will work on providing a more enabling environment to transform the agriculture sector into agribusiness, to fuel further vitality in industry, to encourage entrepreneurship and micro and SME development.
Towards this end, the government has prioritized infrastructure through its Comprehensive Integrated Infrastructure Program. Projects that are ready to go include: the LRT 1 North Extension Project, the Northrail-Southrail Linkage Project, the Palawan South Road, the Panguil Bay Bridge, LRT Line 6, the Agno River Integrated Irrigation Project, and the North Luzon Expressway Project, among others. However, given the huge cost of infrastructure, the government will undertake infrastructure modernization with the private sector and local government units as partners.
We will continually improve the quality of human resources, hence we are spending more on education.
We must cut loose from policies that distort market competition. They simply raise the cost of doing business, and deter investments and job-creation. The macroeconomic reforms currently implemented must now be complemented with microeconomic reforms to improve industry competitiveness. We need a pro-market regulatory environment, which dismantles regulatory capture, to support a high growth.
Government support to entrepreneurs will be strengthened through its MSME Programs. We thus have to simplify documentary and collateral requirements of lending institutions to improve credit access for micro, small and medium businesses. The creation of a Credit Information Bureau must be pushed to assist entrepreneurs availing of bank loans.
Finally, the government must continue implementing with fervor the fiscal reforms we have started. We will sustain improvements in taxes by improving on collection efficiency. We will extend more effective oversight on the GOCCs. We will manage our debt more proactively. We will step up in governance reforms. Finally, we will promote peace and order. We all see the need to build a political environment that supports high growth.
In closing, I leave this challenge to all of us. Let us raise our achievements a notch higher so that we can bring the country to the prosperity that our people truly deserve. Thank you.
