Economist says Phl to grow 7% this year

MANILA, Philippines - Noted Filipino economist Bernardo Villegas has expressed optimism the country’s gross domestic product (GDP) could grow seven percent in 2010 and further by seven to nine percent in the next five to six years.

Villegas’ economic growth projection for the year is much higher compared to the government’s target of five to six percent. The GDP already expanded by 7.9 percent in the first half of 2010, led by the manufacturing sector.

In a forum organized by the Philippine Institute for Development Studies (PIDS), he said the robust growth could come from the so-called seven big winners.

The Joint Foreign Chambers earlier identified these sectors as infrastructure projects, creative industries, agribusiness, business process outsourcing, manufacturing and logistics, mining; and tourism, medical travel and retirement.

The Philippines is expected to generate $75 billion in foreign direct investments and 10 million jobs over the next 10 years by developing these key sectors.     

To boost the overall growth of the agribusiness sector, Villegas said providing more farm-to-market roads and post-harvest facilities could increase the productivity of the farmers.

He said support is needed particularly by fruits, vegetables and fisheries farmers, noting these products have comparative advantage in the export market.

Apart from these sectors, the economist added the renewable energy and electronics and semiconductor sectors could also provide needed boost for the economy.

However, Dr. Romeo Reyes, visiting research fellow of the PIDS, expressed concern over the low investment rate reaching 17.2 percent in the first semester.

Reyes said the country’s investments rate has been stagnant at between 14 to 15 percent for the last five years, while that of Asian neighbors are averaging 25 to 27 percent.

He said the Philippines must undertake measures to improve its investments rate at a much faster rate.

With this, Rolando Tungpalan, deputy director general of the National Economic and Development Authority (NEDA), said the government recognized the need to put up the right infrastructure to bring down the cost of doing business in the country.

 “But it is not (only) hard infrastructure that is necessary, we (also) need to bring in the soft infrastructure. We refer to a responsive, regulatory environment that would allow the right tariffs or charges to be made so that investors can have the right level playing field and a few return of their investments,” he noted in the same forum.