The Philippine Online Chronicles

Strong foreign trade performance backed by global economic recovery added to election-related spending last year helped usher the Philippine economy to its highest performance in more than two decades, the National Statistical Coordination Board (NSCB) said.

The country's gross domestic product (GDP) posted a record 7.3 percent growth last year, compared to 1.1 percent growth recorded in 2009. NCSB added that this can also be credited to peaceful elections and various sectors' renewed trust in the government.

NCSB Secretary General Rolando Virola says that the 2010 economic performance has well surpassed the 5-6 percent government target for the year. He also noted that it was the highest GDP growth recorded after the Marcos administration ended in 1986.

The surge in economic growth is backed by the rebounding performance of major economic sectors, such as the industry sector which leaped to a 12.1 percent growth compared to 0.9 percent posted in 2009.

While the services sector grew by 7.1 percent from previous 2.8 percent, NCSB blamed the "abnormal weather conditions" for the agriculture, forestry and fishery (AFF) sector's decline in performance for most of the year.

Although a rebound was observed in the final quarter, AFF went down 0.5 percent less than 2009's zero percent growth.

"Of the 7.3 percent growth in GDP for the whole year of 2010, 3.9 percentage points came from Industry and 3.5 percentage points came from Services while AFF pulled down the growth with negative 0.1 percentage point," Virola said in a statement.

Data from the World Factbook of the United States' Central Intelligence Agency (CIA) said that the Philippines was able to weather the 2008-09 recession better than its neighbors because of lower dependence on exports, large remittances from millions of overseas Filipino workers, and growth of the business-process outsourcing industry, among others.

It also observed an average of 4.5 percent economic growth during the years of former president Gloria Macapagal-Arroyo in office, but noted worsened poverty due to high population growth rate and unequal income distribution.

By 2009 estimates, the services sector churns out 54.6 percent of the country's GDP, while the industry and agriculture sectors provide 31.7 and 13.7 percent, respectively.

GDP is one of the indicators of a country's economic health, according to investopedia.com.

Economic recovery

National Economic and Development Authority (NEDA) director general Cayetano Paderanga Jr. cited several economic activities which played a part in the enhanced economic performance.

According to Paderanga, the industry sector's growth was due to brisk manufacturing of food, electrical machinery, petroleum and coal products "consistent with the strong pick-up in domestic demand and the rebound in external trade."

He also added that the services sector remained stable due to "flourishing domestic investment, strong growth of business outsourcing, hotels and restaurants, wholesale and retail trade, and import and export trade."

Citing his confidence that the economy “is on a path of strong recovery,” he said that the government have targeted a 7-8 percent GDP growth for 2011, while forging strengthened partnerships with the private sector whose investments will be tapped to fuel economic growth.

Some economists are not expecting the Philippines to reach the government-set target, however.

Prof. Victor Abola, an economist from University of the Asia and the Pacific, said that the country would instead post a 6.5 to 7 percent growth by the end of 2011.

"I don't think we will see the same level especially this year as there are various procedures to be satisfied first before the private-public partnership (PPP) investments get done," BusinessWorld quoted Abola.

Moreover, Prof. Raul Fabella of the University of the Philippines said that "real growth will perhaps come next year as PPP prospects are quite dim yet."

Meanwhile, some netizens commenting at the GMA News website are searching for visible signs of the economic growth the government have reportedly observed.

"(The economic growth) was not felt anyway! Seventy percent of Filipinos still live on P104 per day or less. There's nothing to become happy about," one sheilette commented in Filipino.