Faster economic growth seen in 2nd quarter

Faster economic  growth seen in 2nd quarter

The Philippine economy was estimated to have grown faster in the second quarter than the 4.9-percent recorded in the first three months due to increased government spending and better performance of the financial market.

Deputy Governor Diwa C. Guinigundo of the Bangko Sentral ng Pilipinas told reporters that the second quarter was also not beset by factors seen in the previous three-month period, notably the political turmoil in the Middle East and North Africa as well as the earthquake and tsunami in Japan.

“Also, I think because of the carryover [from 2010] of the adjustment pains of the Aquino administration, there was modest spending in the first quarter of 2011,” Guinigundo said. “In the second quarter, based on the testimony of the Department of Budget and Management at the budget hearing [in Congress], there was a catch-up spending going through the second half of the year.”

Guinigundo added that monetary authorities noticed in the second quarter that the inflow of foreign capital going into the stock market and bond market was supportive of growth.

“Remittances from overseas Filipinos continued to be resilient in the second quarter and the business process outsourcing industry also contributed to more inflows,” Guinigundo said.

BSP documents showed that remittances coursed through banks in June reached a record monthly high of $1.7 billion. This brought the cumulative remittances during the first semester to $9.6 billion, an increase of 6.7 percent over the same period last year.

“All told, I think these developments will point to a better turnout in the output performance of the economy for the second quarter,” Guinigundo said.

As early as May, market watcher Barclays Capital said it was maintaining its full-year growth forecast of 5 percent for the Philippines despite the first-quarter performance settling lower than the 5.1 percent it expected.

Even then, the investment bank said in a research note that first-quarter GDP grew 1.9 percent compared with the previous quarter. This was “above expectations of 1.6 percent and compared with 0.3 percent previously.”

On the other hand, New York-based think tank GlobalSource Partners said the Philippine economy would still grow 4.8 percent this year despite an expected “increased lethargy” in the second quarter.

GlobalSource cited data on leading economic indicators from the National Statistical Coordination Board, which hinted at slower economic activity in the second quarter.

By: Ronnel W. Domingo
Philippine Daily Inquirer

12:08 am | Monday, August 22nd, 2011

REAKSYON NI JUAN PART 2: FASTER   ECONOMIC GROWTH SEEN IN 2ND QUARTER

Reading the article from Philippine Daily Inquirer dated last August 22, 2011 which talks about the Philippine economy makes me feel more positive that our country is continuously growing for a better development. It is nice to read and know about what will be the status of our economy for the second quarter. They have been estimated that the economy will have a faster growth in the second quarter. I am happy also that despite the presence of different factors that might affect our economy such as the political havoc in Middle East and Africa as well as the disaster happened in Japan, our economy has remained to its better status. In fact, our economy has never been affected and continuously growing because of the remittances of the OFW’s and because of the outsourcing industry. Knowing everything about this, I am proud and I salute all the OFW’s who have been the “living heroes” of our country specifically of our economy. They have been sacrificing themselves to give better lives to their family. Their safeties are at risk while working in other country just to send and provide their family with their needs. They are not only helping their own families but they have been greatly a big factor to boost our economy. With their big help, I think the government should give them proper and just benefits because without them, we cannot experience the continuous growth of our economy. The article has stated various figures that show an increase of our economic growth. Maybe the figures are not just high enough but a little increase in the growth of our economy really matters. No matter how small the increase is, it is really important to give emphasis on it.

Nowadays, I can feel the crisis of our country. The oil prices are continuously increasing. If there is a rollback, it is too low to notice. Even the price of the sardines will be increased. The sardine which has been the affordable canned good of those who cannot afford the expensive foods has been affected also. It is so sad that even this good has been affected because of the continuously increasing of everything in our country. I say everything because I cannot enumerate all the things that have been increasing for the past years. All the basic needs are increasing but the wages of the Filipinos are still the same. I am still a student but I am worried when the time that I will reach to that point where I will find my own work and I am the one who will provide me with everything. How will be the economy on that year? Is it still the same? Or will it be my greatest nightmare? 

Personally, I am sad and I am also happy. I am happy that there is still hope for all of this. That our present administration is working so hard to give what is right for all the Filipinos and for our country especially our economy. I am happy to read about this growth of our economy from my article. However, I am sad and worried on how long will all this take. Will it be a longer duration or will it be a temporary sweet taste of the hidden truth of what is really the status of our economy now? 

Well, I remain positive! It will be a joint effort of the citizens our country who still cares and hopes for the better development of our country.

Philippine Economy

BANGKO SENTRAL UPBEAT ON 2011 ECONOMIC PROSPECTS

MANILA – The Bangko Sentral ng Pilipinas (BSP) sees continued positive developments in the domestic economy this year despite uncertainties in the global front.

BSP Governor Amando Tetangco Jr. said the country is “entering 2011 from a position of strength” after proving its resiliency to the recent global economic and financial crunch and its remnants.

Tetangco said major economies continue to show weak recovery from the recent global economic downturn but the domestic economy churned in higher-than-expected growth, manageable inflation, and remittances and capital flows continue to be strong, among others.

The economy posted a 7.5 percent growth, as measured by gross domestic product (GDP) in the first three quarters of 2010 because of recovery in investments and exports.

This growth is unexpected and is higher than the five to six percent growth target set by economic managers for last year.

This performance is projected to be repeated this year and enable the economy to meet the seven to eight percent GDP growth target.

Also, inflation remains low with the end-November figure at 3.8 percent, near the lower end of the 3.5-5.5 percent target for last year.

For 2011, monetary officials see the rate of price increases to average at 3.6 percent, near the lower end of this year’s three to five percent target.

Tetangco said this low-inflation environment provides monetary officials the flexibility to keep policy rates at record-low.

To date, central bank’s overnight borrowing or reverse repurchase (RRP) facility is at four percent while the overnight lending or repurchase (RP) facility is at six percent. These were maintained since July 2009 after a total of 200 basis points cut from December 2008 to July last year to address impact of the recent global financial crunch.

“Nonetheless, given stable domestic financial conditions, the BSP started a paced unwinding of its monetary easing measures in the first quarter of 2010,” Tetangco said.

Among these measures are the reversal to pre-crisis level of the P20-billion rediscounting budget after this was increased to P60 billion in 2009 and the rate of this facility was reverted to the same level as that of the RRP facility instead of 3.5 percent.

Relatively, foreign exchange inflows continue to be strong due to the money sent home by Filipinos abroad as well as foreign portfolio and direct investments.

Remittances were projected to grow by eight percent in 2010 compared to the US$ 17.3 billion in 2009.

As of last October, remittances amounted to US$ 15.456 billion, a 7.9 percent year-on-year growth, while for October 2010 alone the inflows registered a record-high of US$ 1.67 billion.

The country’s gross international reserves (GIR) reached US$ 60.6 billion as of last November, higher than the end-2009 level of US$ 44.2 billion while the balance of payments (BOP) surplus totaled US$ 13.2 billion.

These performance prompted ratings agency Standard and Poor’s (S&P) to upgrade the country’s long-term foreign currency sovereign credit rating one-notch higher to “BB” with stable outlook from “BB-/stable outlook.”

“The credit rating upgrade is also significant in that the Philippines received this directly, without having to go through the standard credit outlook upgrade first,” Tetangco pointed out.

The BSP chief said debt service ratio also improved to 7.9 percent as of last September from year-ago’s 8.7 percent amid the increase in external debt to US$ 59.8 billion as of end-September 2010.

While the local currency remained strong against the dollar with the volatility and appreciation in the middle of the range in the region.

Tetangco said the domestic banking system is still stable with the average capital adequacy ratio (CAR), the bank’s risk-based financial health gauge, at 15.23 percent, higher than the 10 percent requirement of the central bank.

He said 2011 is a “critical year that could spell whether we would be able to press on the road to sustained strong recovery.”

Among the global risks to domestic monetary policy and banking regulatory reforms that he sees are the uneven growth between advanced and emerging economies, shifting investor preferences and measures of risk, and market reaction to regulatory changes.

Tetangco said this year “opened with much hope” for the country and cited that monetary officials will “remain committed to its role as the steward for price and financial stability.”

“The BSP’s policy priority will be focused broadly on exercising continued vigilance over price developments, nurturing a healthy external payments position and management external debt, sustaining key financial reforms that will strengthen bank capitalization, supervision and market discipline, and pursuing social advocacies that are supportive of an inclusive economic growth,” he added.

Source: Philippines Today

Reaksyon at Komento ni Juan

Knowing the status of our Philippine economy makes sense to me. This helps me to become intuitive of what is really happening in our country under the leadership of our new President, Noynoy Aquino together with the new and appointed officials of our government. As I search from the net and read some news about the status of our economy, it gives me hope that our economy has still chance to recover from downfall before. Reading the article from "Philippines Today", it has been stated there that our economy is growing and moving positively...small figures but it really matter. 

According to Amando Tetangco Jr, BSP Governor, he has stated that that there is still hope for the stability of our economy. He also added that the BSP’s policy priority will be focused broadly on exercising continued vigilance over price developments, nurturing a healthy external payments position and management external debt, sustaining key financial reforms that will strengthen bank capitalization, supervision and market discipline, and pursuing social advocacies that are supportive of an inclusive economic growth.  

As a student and studying Business course, this article gives me an idea on how the Bangko Sentral ng Pilipinas and other authorities involved in making our economy stronger and stable work together and make use of the best possible solutions and strategic plans to sustain the stability of our economy. There are lots of figures mentioned that show how our economy is growing and doing well last 2010 and even this year. It is good to see and know all of those figures that continuously increasing since we can show how our economy is improving. 

I believe that in every problem, there is solution. If we are experiencing some turbidity in our economy, it is never too late to recover and to make it stand again .In every downfall, there is victory. The victory does not only lie on the President but for all the citizens also. Each Filipino can contribute to the stability and success of our economy. Let us support our leaders who knows what is better for our country. As I make this blog, what is inside my mind is the word

 "corruption". It has been the root and I believe it will be the solution. It is so nice to see how our country will turn into corrupt free officials and corrupt free country. But I 'm gonna crossed my finger first..:)