A combination of benign inflation, low interest rates and a strong currency provided the impetus for growth for the Philippine economy in 2007. GDP rose 7.3% from 5.4% in 2006, while GNP (which includes remittances sent by overseas Filipinos) registered 7.8% from 6.1% last year.
As expected the services sector, boosted by BPO and call centres-- along with the strong showing of financial (especially insurance)-- posted the highest growth rate among all sectors, at 8.7% compared 6.7% the previous year.
Industry rose by 6.6%, boosted by the 25% growth in mining, while Agriculture, Forestry and Fishery increased by 5.1% from 3.8% in 2006.
Remittances was more than what I expected, at US$16.5 billion, is 19.5% higher than last year's.
2008 will be a challenging year, mainly due to the ripple effect of the slowdown in the US economy. But the stellar performance of the economy in 20007 means we are in a better position to weather any downturn.
I only hope that foreign direct investments in the Philippines finally pick up. Compared to our ASEAN neighbors, we lag behind. Again, this is largely due to inadequate levels of infrastructure as well as expensive power rates. And which is aggravated mostly by perceptions of corruption and red tape.
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