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June 1, 2000, The Philippine Star, Editorial, Tepid growth should serve as a challenge,

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June 1, 2000, The Philippine Star, Editorial, Tepid growth should serve as a challenge,

With all the bad news in the past months, it's a pleasant surprise to learn
that the economy managed to grow by 3.4 percent in the first quarter.
Government economic managers admitted that the figure was slightly lower than
the 3.8 percent projected growth in the gross domestic product for the first
three months of the year. It is also way below the 6 percent average for the
region, reinforcing observations that the Philippines is again lagging behind
its neighbors in economic growth. Still, 3.4 percent is much higher than the
0.7 percent GDP growth posted in the first quarter of 1999.
Lackluster performance in the agriculture and services sectors dragged down
growth. The government had expected 2.2 percent growth in agriculture but the
sector expanded by only 0.2 percent. Services, on the other hand, grew by 3.8
percent, below the projected 4.8 percent. Efforts to contain the deficit also
reduced government consumption by 1.9 percent. Industrial output, however, rose
by 4.8 percent, higher than the projected 4.1 percent target.
What is surprising is that growth was achieved despite all the setbacks in the
early part of the year, among them a series of fuel price increases and a stock
market scandal that scared away investors. Government economic planners have
reason to be optimistic that the target growth of 4 to 5 percent in GDP this
year can still be attained, with agriculture putting in a better
performance.
Economic figures for the rest of the year, however, will be affected by the
Mindanao problem, the weakening of the peso and the continuing dull performance
of the stock market. The Abu Sayyaf seized Philippine hostages, most of them
children, from a school in Basilan near the end of March. A month later, a
ferry sank, a plane crashed, and 21 mostly foreign hostages were seized in the
Malaysian island of Sipadan. Since then, bombings have rocked Mindanao and
Metro Manila and a plane was hijacked.
If such disasters continue to plague the country, the first quarter figures
will be the best the government can achieve this year. There's hope in sight,
though. A peace agreement may be reached with Muslim secessionists and the
hostages may be freed. As for the other problems, the administration will have
to show firm resolve in implementing reforms. The lower-than-expected GDP
growth, behind Asia's dynamic economies, should serve as a challenge for the
go-vernment and the nation to do better.

 

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on Jan 03, 13