Philippine Economy Exceeds Target, Grows 5.1% in 2005

MANILA, Philippines - The Philippine Economy surpassed its highest forecast in 2005 as the country's Gross Domestic Product (GDP) grew by 5.1 percent.

Accelerated growth (6.1 percent) in the last quarter and record-high inflows from overseas Filipino workers pushed the GDP upwards while Gross National Product (GNP) rose by 5.7 percent in 2005.

Citing the to the recovery of agriculture and healthy performance of the manufacturing and services sectors, Socioeconomic Planning Secretary Augusto Santos said the growth rates "may be considered as the best in more than five years".

Contributing nearly 3 percent to GDP growth, the services sector remained the Philippine economy's main growth drivers in 2005 rising by 6.3 percent (from 7.1 percent last year) spurred by major increases in finance, OFW remittances and tourist arrivals.

Similarly, the manufacturing sector posted a growth of 5.6 percent, the highest since 2001.

If not for the El Niño weather phenomenon, the Philipine economy could have generated a higher GDP at 5.7 percent in 2005. The dry spell tempered the growths of agricultural crops (0.7 percent), livestock (2.0 percent), poultry (1.5 percent) and forestry output (-36.5 percent).

Blesssed with good weather, enhanced technology, and a highly efficient dispersal program, fisheries also posted a robust 5.3 percent growth last year.

Enhanced by changes in the government's environmental policy and rising metal prices in the world market, the mining sector also rose by 9.3 percent compared to 2.6 percent in 2004.

According to Santos,at least 24 large new and expanded mining projectsin 2005 generated $ 339.7 million in investments and have created over 5,000 jobs. Over the medium-term, the investment target is $ 6.16 billion. Overall, the Philippine economy performed very well and withstood the impact of the politics, high oil prices and the slight inflation from the expanded value-added tax (EVAT). The Philippine economy is expected to significantly expand further in 2006 with a 5.7 to 6.3 percent growth range due to the continued mining boom and resurgence in exports.

In the long run, the EVAT is also anticipated to generate additional revenues for the government with more contributionns towards basic government sectors such as education, health and infrastructure.

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