World Economic outlook - Philippines GDP Growth Forecast 2012 : Economic growth in the Philippines gathered pace in the fourth quarter due to increased government spending, but still fell short of the government's full-year target as weakness in exports and lower farm output dragged.
Still, Economic Planning Secretary Cayetano Paderanga said following the gross domestic product data release that the government is sticking to its 5%-6% growth target for this year.
"Investment is expected to post strong growth in 2012 despite the global economic uncertainties. ... We anticipate strong investment from both the public and private sectors," Mr. Paderanga said. "Public construction will significantly contribute to growth in 2012."
The National Statistical Coordination Board said Monday that GDP grew 3.7% from a year earlier in the October-December quarter, picking up from growth of 3.1% and 3.6% in the second and third quarters, respectively.
For the full year, GDP grew by 3.7%—less than half of the 7.6% growth registered in 2010. The government had expected GDP to between 4.5% and 5.5% last year.
The median forecast of 12 economists in a Dow Jones Newswires poll for fourth-quarter and full-year growth was 4% and 3.7%, respectively.
NSCB Secretary General Romulo Virola attributed the "feeble" full-year growth to weakness in the global economy and lower spending by the government on infrastructure in the early part of last year.
Gross national product increased 2.6% in the fourth quarter, and 3.5% in the whole of 2011.
Bangko Sentral ng Pilipinas Governor Amando Tetangco said after the data that monetary policy will remain supportive of economic growth.
"We will continue to ensure that policy settings are appropriately accommodative of noninflationary growth," said the governor, adding that the BSP would assess the growth prospects of the Philippines' major trading partners and "the impact on our own domestic growth and inflation dynamics."
"Almost everyone expected this slower growth and this should have been priced in by the market," said Marc Bautista, research head at Metropolitan Bank. "The story really is 2012 and when pump priming can start in earnest. We still expect growth, but not as strong as the government expected [5%-6%] if we don't have these projects."
Metrobank projects growth of 4.6% for the economy this year.
Emilio Neri, an economist with Bank of the Philippine Islands, said he believes last year's 3.7% growth might delay the country's hopes of a credit ratings upgrade.
"Growth of below 4% might not warrant an immediate credit rating upgrade for the simple reason that the fiscal position is not going to be a rosy as expected due to the slow performance of the economy," he added.
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