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THERE
are no difficult barriers for government to target and
actually achieve higher levels of growth with positive
factors propping the local economy, a noted economist
said on Monday.
But
what may be more daunting is how to sustain the bullish
outlook for economic expansions like this year’s 6.1
percent to 6.7 percent pegged by President Arroyo’s
economic team, according to Gilberto M. Llanto, senior
research fellow at the Philippine Institute for
Development Studies.
“It
is no longer an issue of whether we will grow, but how
can we sustain it and make it to a higher growth path.
The reforms done way, way past are now paying off… We
are now seeing more revenues, the deficit is being
plugged. Our economy has also adjusted to the realities
of the global market,” he added.
Alongside Llanto’s somewhat cautious optimism, however,
are some encouraging fundamentals which the former
National Economic and Development Authority deputy
director general thinks may help the economy grow to a
higher level.
“The
economy has learned to discount the election-related
noise… if ever, the effect of it [on investor and
consumption sentiment] is already minimal. Investors do
not decide at the spur of the moment, they look at it
the long-term point of view and adjust their investment
plans accordingly,” he said.
“Services would still be the growth driver:
telecommunications, banking and finance—that is where
the private sector is investing,” Llanto added.
And
if government delivers on its promise to spend more for
major infrastructure undertakings this year, then public
spending can provide another impetus for growth, he
said.
Socioeconomic Planning Secretary Romulo L. Neri earlier
claimed the implementation of major infrastructure
projects, including the LRT-MRT connections, the LRT-Line
1 extension to Cavite, the C-5 connection between the
North Luzon Expressway and the South Luzon Expressway,
the Skyway Stages 2 and 3, the Tarlac to La Union Road
project, the Laguindingan Airport project and the
Panglao Airport project, can provide an additional
percentage expansion in the country’s gross domestic
product (GDP).
GDP,
the total value of goods and services produced by the
local economy, grew 5.4 percent last year on the back of
strong exports, consumer consumption and a sturdy
services sector.
“If
the government can provide adequate cover especially for
foreign-funded projects, address right-of- way issues,
then it can be a growth driver because of employment
considerations . . . construction in the Philippines is
labor-intensive,” Llanto noted.
El
Niño’s effect on farm output, which comprises a fifth of
economic output, especially rice production, meanwhile
can be counterbalanced by the government’s rice
importation program, and thus may not significantly
affect inflation which in turn could weigh down GDP
growth.
“What
will moderate the impact on inflation is importation of
rice. So even if El Niño hits us, food prices especially
rice will not be gravely affected because of the open
trading system. If we can import our grain requirement
ahead of time we will not be hit hard,” Llanto said.
The
bigger issue though, in relation to the drought, is how
the government responds to the plight of those affected
by it, he said.
“The
question there is what programs are in place to address
their plight,” Llanto said. |
