Thursday, 31 January 2013

EXTRA: Stellar economic growth at 6.6%

Palace: Good governance means good economics
Economic team ... President Aquino (right) predicts an impressive Philippine economic growth of more than 6 percent in a speech during the 40th anniversary of Neda on Tuesday. He is shown with (from left) former Neda Director General Cayetano Paderanga, Neda Deputy Director General Rolando Tungpalan and current Neda chief Arsenio Balisacan. Lyn Rillon. – Inquirerpic


LIVING up to President Aquino’s advance information that the numbers would impress, the Philippine economy expanded 6.8 percent in the fourth quarter of 2012, lifting full-year growth to 6.6 percent.

The figures that government economists and statisticians announced Thursday beat their targets and analysts’ expectations.

Socioeconomic Planning Secretary Arsenio M. Balisacan said that on hindsight, the government’s 5- to 6-percent growth target for the past year seemed conservative.

Median forecasts from the World Bank and other institutions were 5.9 percent for the fourth quarter and 6.4 percent for the full year.

Compared with the latest available data from other Asean countries, the Philippines’ fourth quarter growth in gross domestic product (GDP), the value of goods produced and services rendered in a given period, was higher than Vietnam’s 5.4 percent and Singapore’s 1.1 percent.

China’s economy expanded by 7.8 percent in the last quarter. Other countries still do not have available data for the full year.

Unsurprisingly, the GDP announcement by the National Economic and Development Authority (Neda) and the National Statistical Coordination Board (NSCB) was trending on Twitter, earning kudos from industry groups, such as the Makati Business Club.

Private economists, however, were not as impressed, noting that the lingering question was whether such figures could be sustained and translated into better incomes for many Filipinos.

Expectedly, Malacañang cheered the “exceptional” growth rate, trumpeting it as proof of the country’s ability to move toward “equitable progress” on a policy of good governance.

“It is a resounding affirmation of the Aquino administration’s fiscal strategy, backed as it is by our robust macroeconomic fundamentals and more importantly, the principles of good governance,” Budget Secretary Florencio Abad said in a statement.

Presidential spokesperson Edwin Lacierda attributed the economic growth to private sector activity goaded by the administration’s policy reforms.

While it was initially driven by government stimulus, the economic growth was now increasingly being driven by private sector activity, including investments, which grew by 8.7 percent in 2012, Lacierda said in a briefing.

“This means growth is becoming more sustainable from a fiscal and macroeconomic perspective. Private sector activity has been enabled by the Aquino administration’s dedication to positive reform. Without doubt, good governance means good economics,” he said.

Not quite impressed
Benjamin E. Diokno of the University of the Philippines School of Economics, however, was not  impressed.

Diokno said that under  President Corazon Aquino, the economy grew by 6.8% in 1988 after a weak growth in 1987, while under  President  Gloria Macapagal-Arroyo, the economy grew  6.7% in 2004 after a weak growth in 2003, and again by 7.6% in 2010, after a near recession in 2009.

“I agree it’s a strong growth. Considering its long-term growth potential and growth higher than 6 percent might be considered strong. Is it sustainable? That remains to be seen. We’ve seen this kind of growth before and they were not sustained. Is it inclusive? I’m afraid not,” he said.

Diokno said the contribution of agriculture to GDP continued to shrink, posting the lowest growth among the three major sectors.

“Based on the October labor statistics, the recent growth may   be characterized as labor-shredding growth. Close to 1 million jobs were lost,” Diokno said. 

Most Filipinos still depend on agriculture and related sectors for a living.

NSCB Secretary General Jose Ramon G. Albert said industry and services led economic growth on the supply side (sources of goods and services).

On the demand side (where goods and services are used), growth was still largely driven by household consumption and external trade.

Industry grew 6.5% , more than twice the 2.3-percent growth in 2011.

The Neda said the expansion in public and private construction, and the electricity, gas and water sector led the growth.

In the first two quarters of last year, it was public construction that took up the slack in construction, but the private sector took over beginning the third quarter.

“This is what we mean by the private sector upping its stakes in the economy,” said Balisacan, who is also the Neda director general.

“Equally remarkable was the growth in the electricity, gas and water sector, growing by 5.1% , a far cry from its growth of 0.6% in 2011. No doubt this was in support of the increased economic activity in 2012,” he said.

The service sector also beat expectations with a 7.4-percent growth from trade, transport and communications, real estate, renting and business activities and other services.

Trade grew by 7.5% in 2012, more than twice the figure in 2011. 

Growth in transport and communications accelerated at 9.1% compared with 4.3% the previous year.

“We had expected a slower growth for the real estate, renting and business activities, which includes the IT-BPO, owing to the continued slowdown in the global economy. And yet the sector still managed to grow faster than expected at close to 8 percent,” Balisacan said.

There were also notable gains in other services, particularly, tourism-related subsectors, such as hotels and restaurants, and recreational, cultural and sporting activities. 

These subsectors grew 13.3% , compared with only 7.1% in 2011.

Balisacan said he was also pleasantly surprised with the growth in agriculture (2.7% ).

“We only expected a 2.2%-growth from the sector owing to weather disturbances forecast for the year,” he said.

In the first two quarters of 2012, it looked like the sector would underperform with a contraction in the fisheries sector. 

However, the turnaround happened beginning the third quarter and especially in the fourth quarter when the sector grew by 4.7% .

“We are also pleased to note that the output in the fishery sector had gone up by 3.3% , from eight consecutive quarters of contraction if not stagnant growth,” Balisacan said.

Household consumption
On the demand side, household consumption remained the largest contributor to growth in 2012, growing by 6.1%.

Although the growth was slower than the 6.3% in 2011.

Balisacan noted that the growth had been on the increase coming from 5.1% in the first quarter up to 6.9% in the fourth.

Growth was supported by the higher level of economic activity, low and stable inflation, inflows of overseas Filipinos’ remittances and government subsidy mainly through the conditional cash transfers.

“Note, however, that remittances of overseas Filipinos increased by 8 percent in dollar terms, but only by 2.8% in peso terms in October and November 2012,” Balisacan said.

Exports of goods recovered with a growth of 8.7%  for the year from a contraction of 4.2% in 2011. Exports of services grew by 9.8 percent, more than twice the growth the previous year.

“However, this growth was actually slower than expected. Perhaps the sector is already feeling the pinch from the combined impact of the global economic slowdown and the appreciating peso,” Balisacan said.

Fixed capital formation also improved to 8.7% in 2012 as growth in investments for public and private construction and durable equipment registered significant increases.

In spite of the country’s achievements in 2012, Balisacan said the government would not be “lulled” into complacency.

“It is our immediate task to put in place policies and implement programs that will sustain our economy’s growth over the medium term. We shall continue planting the seeds of a structural transformation in our economy to make it more investment and industry-led. This, in turn, will mean more jobs and employment opportunities of high quality for Filipinos, thus ensuring that growth is inclusive and benefits all sectors of society,” he said.

Raise productivity
Cid L Terosa of the University of Asia and the Pacific said the growth level of at least 6% could be maintained as long as the Philippines kept building up productivity.

So far, Terosa said, the fourth quarter and full year 2012 growth rates were impressive but the question remained whether those numbers could translate into better income for many.

“Employment and continuous structural changes are keys to economic growth over the medium-term,” he said. - Inquirer

EXTRA: JV Ejercito Estrada thanks Pnoy for Kasambahay Act

 Household helps have become an important member of many Filipino homes that they deserve better deal from their employers.

SAN JUAN City Representative JV Ejercito Estrada expressed gratitude to President Benigno Aquino III amid reports that PNoy has already signed into law the Domestic Workers' Act, widely known as Kasambahay Act.

"I'm very thankful to President Aquino for his concern over the plight of household helps who have long been at the mercy of their respective employers," Ejercito Estrada said.

"This is the best gift we can give at the start of the new year for these hardworking men and women who tend to our homes and take care of our children."

The Kasambahay Act ensures the rights and welfare of the estimated 2 million household helps all over the country and also pegs their minimum salaries.

Description: the new law, the minimum salary of a domestic helper is pegged at P2,500 in Metro Manila, P2,000 in chartered cities and first-class municipalities, and P1,500 in the rest of the country.

The law orders the Regional Tripartite Wages and Productivity Board to determine succeeding salary increases following consultations with stakeholders.

Apart from monetary compensation, which includes a 13th-month pay, the law also mandates employers to enroll their househelpers in Social Security System, Philhealth, and Pag-ibig Fund and to pay part of their monthly contribution.

Also, domestic helpers should be afforded at least eight hours of rest every day and a day off a week.

"Most household helps have very little education," Ejercito Estrada said. “That is why I'm glad that my proposal to require employers to allow their household helps to complete their basic education has become part of the new law."

A similar bill was first filed 15 years ago. The current bill went through countless modifications before it was finally approved in the 15th Congress in the first week of December.
The San Juan lawmaker, as vice chairman of the Committee on Labor, is among those who shepherded the bill through the House of Representatives.

EXTRA: Plastics: Its real truth

After becoming useful, plastic materials turn into a menace of environment in the form of rubbish.

Teacher III
Nabua National High School
Nabua, Cam Sur

POLLUTION is causing too many ill effects on the lives, health, and economy of the nation. The plastics and polystyrene packaging industry, long being blamed for worsening environmental situations. (The Modern Teacher, January 2000)

Our growth as a person is not solely dependent on our home Environment. We also need our community, the church, the government to help us develop fully and grow as persons. Everyone is needed to be concerned about the community, however it carries with it the importance of lessening or recycling garbage to help in the country’s pollution control.

Here are some truths about plastics, the industry long taking the blame for our worsening environmental situation, has bared the truths about their products.

Plastic’s basic raw material of polystyrene plastic is styrene monomer, a simple molecule made of Carbon and Hydrogen.

These elements are comprised of Hydrocarbons such as petroleum and natural gas and are also found in sugar as carbohydrates and in fats.

On CFC use, the Environmental Protection Agency  (EPA) says that only two to three percent of CFC’s used in the US went to the production of Polystyrene packaging. In 1992, our manufacturers of extruded polystyrene foam in the Philippines, who used CFC’s voluntarily phased this out, far ahead of any other industry. 

 Plastic containers should be recycled for new container products.

On the alternative compounds in foam food service packaging, in most countries manufacturers who once used CFC switched to several alternative such as pentane, HCFC and carbon dioxide (CO2). On the advantages of using foam polystyrene, Foam polystyrene packaging is the better food packaging material because of its strength, economy, sanitation and safety, reusability, superior insulation, environment friendly and foam polystyrene is 100% recycla
ble and contains absolutely no CFC.

There are a number of provinces, and cities in our country which ban the use of plastics such as Los Baños in Laguna, Iriga City in CamSur and Malolos in Bulacan to name a few.

The ban on plastics does not actually protect the environment at all !

It leads to more paper use which means more trees cut and higher water and power use.

Our Local Government Units should Enforce the Waste Segregation Law because it is the best way to curb our problem on environmental pollution. – Bicol Mail