NEDA chief says economy likely grew by 6.5% in Q4
ECONOMIC GROWTH likely stayed steady at 6.5% in the last three months of 2010, a Cabinet official yesterday said, allowing for full-year growth of slightly above 7% that tops the government’s 5-6% target.
(Read the full article here: http://www.bworldonline.com/content.php?id=24915)
This article is contradictory to the news I've been hearing lately. There are a lot of price hikes going on in the country (taxi fares, for example). In other news, Philippine stocks have fallen almost 10% (read this article: http://www.businessweek.com/news/2011-01-21/indonesia-philippine-indexes-drop-at-least-10-from-records.html )
I may not be an economic analyst, but I do know that when prices rise, people are less inclined to purchase. I do agree with one statement in the article, though:
University of the Philippines economist Benjamin E. Diokno, however, said holiday spending alone would not be enough to keep growth at 6.5%.(Let's face it. It's the culture of the Filipinos to be willing to buy no matter how expensive for the holidays. )
How is it possible that the economy will grow if prices have become relatively expensive? The rising price of gas, for example, has caused some sort of domino effect: fuel is an input product for public vehicles, now we have a 10-peso price hike for taxis (buses and jeepneys will likely follow in a few weeks); the production of food also requires fuel; producing electricity also requires fuel.
Here's a quote from the other article I read:
“Inflation is the biggest threat and concern in the market now,” said Julian Tarrobago, who helps oversee $200 million in assets at ATR KimEng Asset Management Inc. in Manila. “The market is well aware that inflation will come after rapid growth and it has now reached a point that it has become an issue.”Indeed. This makes me wonder how the Philippines will be in the months to come... Inflation will only worsen the situation of the many Filipinos who are still struggling to make their ends meet; and I shouldn't forget to mention that the salary for Filipino workers have not increased yet, and it's likely that companies will be forced to reduce employees to reduce costs; which will result to even more problems for the country. I shudder at the thought that the people who are hungry now will likely suffer from complete starvation.
The economy is what keeps people alive, and our country needs to have a good economy.
To be honest, I'd like to be optimistic about the Philippines this year. Unfortunately, the news I'm reading isn't helping at all.
