Philippines in temporary economic slowdown: official<\/p>\n
Agence France-Presse
\nManila<\/p>\n
The Philippine economy is in a temporary downturn but is not
\nheaded for a meltdown, Economic Planning Secretary Augusto Santos
\nsaid on Monday.<\/p>\n
Gross domestic product (GDP) growth eased to a lower than
\nexpected 4.1 percent in the three months to September due to high
\noil prices and anemic agricultural output, endangering the
\nofficial full-year target of 5.1 percent.<\/p>\n
The government later reported that merchandise exports had
\nslipped 3.2 percent in October due to weak global demand for
\nelectronics, which account for nearly 70 percent of overseas
\nshipments.<\/p>\n
The economy is probably not at the take-off stage \"but neither
\nis it, by any stretch of imagination, on the road to meltdown,\"
\nwhich implies sustained decline, Santos said in a statement.<\/p>\n
He blamed the third quarter blip on drought, lower government
\nspending as President Gloria Arroyo struggled to control Manila's
\ngrowing debt, and a decline in private sector construction
\nactivity.<\/p>\n
\"The slack, however, is not permanent. The effects of the El
\nNino (weather pattern) should be gone in the fourth quarter,
\nthereby boosting agriculture,\" he said.<\/p>\n
Taking up the slack are record-high cash transfers of
\nFilipinos working abroad, who he said should remit some US$10.3
\nbillion to the Philippines this year.<\/p>\n
However, private consumption is muted, even as the
\noverwhelmingly Roman Catholic nation approaches the Christmas
\nholidays, the traditional peak season for the manufacturing and
\nretail sectors.<\/p>\n
\"Families of OFWs (overseas Filipino workers) are not
\nsplurging on their remittance income. The consumption growth rate
\nis still 4.8 percent for the third quarter, the same as in the
\nsecond quarter,\" Santos said.<\/p>\n
\"Rather, families are saving the money in banks,\" Santos said.<\/p>\n
As such, \"we are optimistic that the implied savings will
\naugur well for growth in investment and consumption in 2006,\" he
\nadded.<\/p>\n
The official said foreign direct investment jumped 70.5
\npercent from a year earlier to $929 million in the eight months
\nto August, with portfolio, or financial sector, investment over
\nthe past 11 months rising to around $2 billion, or five times
\nlast year's comparative levels.<\/p>\n
Fresh mining and construction activity next year should also
\nhelp, with investment in equipment for mining and construction
\nincreasing 59 percent in the nine months to September, Santos
\nsaid.<\/p>",
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