Malacanang vows to keep Philippine economy growing in 2006

Manila, Philippines - January 5, 2006

Malacanang Palace said that the Philippine economy grew at a "respectable pace" in 2005 and that it is bent on sustaining its economic growth in 2006.

"The Philippine economy grew at a respectable pace under generally stable macroeconomic conditions. Notwithstanding internal and external challenges, the economy is expected to continue its notable performance," according to the Malacanang Palace 2005 Accomplishment report.

The report said economic growth was sustained in the midst of adverse internal and factors such as rising global oil and commodity prices, citing gross domestic product (GDP) growth of three percent in 2001 to 4.6 percent in 2005 and gross national product (GNP) growth of 3.5 percent in 2001 to 5.47 percent in 2005.

The Malacanang report cited the following accomplishments and economic gains in 2005:

• Managed inflationary pressures and maintain inflation at single-digit levels, averaging at 7.7 percent in the first 11 months of 2005 despite volatile world oil prices and the increases in wages, electricity and transport fares.
• Maintained interest rates at single-digit levels, making credit and loans more affordable and supportive of the growth of the Philippine economy.
• Strong performance of the peso, making it the world's best performing currency in 2005, and the Philippine Stock Exchange, which registered the best performance in Southeast Asia.
• Achieved balance of payments (BOP) surplus of $2.324 billion for the first 10 months of 2005, a reversal from the BOP deficit of $280 million in 2004.
• Registered all-time high remittance of $8.8 billion as of October 2005.
• Net inflows of foreign direct investments (FDI) into the country reached $812 million from January to September 2005, a growth of 68.8 percent compared to $481 million in the same period in 2004. Foreign Portfolio Investments surged to $2.1 billion for the first 11 months of 2005, more than four times the $486.8 million total for 2004.
• Exports grew by 3.2 percent to $33.76 billion in January - October 2005 from $32.72 billion in the same period in 2004 despite weakness in the international market.
• Revenues also surged to P733.7 billion as of November, up by 15.1 percent from the same period in 2004 and P15.1 billion higher than the revenue target of P718.6 billion for the first 11 months of 2005.

Malacañang said that for this New Year, it intends to generate more investments through an aggressive campaign in 11 priority areas supporting its goal of 10 million jobs by 2010.

The priority areas are: agribusiness, healthcare and wellness products and services, information and communications technology, electronics, motor vehicle products, energy, infrastructure, tourism, shipbuilding/shipping, jewelry and fashion garments.

Malacañang said the remaining challenge is to build on the reform measures and consistently align policy initiatives in order to strengthen the country's fiscal health and enhance investor confidence in the Philippine economy.

It said under the second phase of reforms, government will continue to adopt measures to effectively implement the tax

reforms and tax administration initiatives to further raise tax awareness, optimize revenues and increase the key tax ratios.

Press Secretary Ignacio Bunye said President Gloria Macapagal-Arroyo remains focused on social reforms, economic takeoff and political change.

"Our agenda is not to please anybody except the Filipino people who have waited too long for a better life and future," said Bunye, who is also presidential spokesman.

Sources: Malacanang Palace / Sun Star

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