7.3% GDP growth in 2010

NEDA released today the 2010 national income accounts (NIA). Growth in gross domestic product (GDP) was high, 7.3 percent. Gross national product (GNP), which is GDP plus net factor income from abroad and errors and omission, had 7.2 percent growth. See the NEDA press release here. 

The country’s GDP growth the past few years were erratic. 7.2 percent in 2007, 3.8 percent in 2008, and only 1.1 percent in 2009. The years 2008-09 saw a bad global financial turmoil, so that GDP growth were low for many countries, exports, investments and stockmarket levels shrank.

It is important that public and foreign confidence in the economy will remain, if not become stronger, so that more investments, more businesses will be started or continued. In the process, more jobs will be created and sustained.

No govt guarantees in PPPs

A senator correctly pointed out that big ticket projects undertaken by private contractors under the Public Private Partnerships (PPPs) do not need government guarantees that will amount to several billion pesos per year per project. See the news, Recto backs call to end state guarantees in big-ticket projects.

Companies should enter those big infrastructure projects because they will earn substantial profit from regular commercial operation, not because they are assured of huge government guarantees and subsidies. At nearly P300 billion per year average budget deficit the past few years, it is not advisable for the government to enter into contracts that might further bloat the deficit and the overall public debt stock.

Foreign reserves, selected countries

Here’s an update of the level of foreign reserves of selected countries as of December 2010, unless indicated. Units in US$ Billion.

1. China, 2,648.3, Sept. 2010

2. Saudi Arabia, 449.0, Nov. 2010

3. Russia, 448.8, Nov. 2010

4. Taiwan, 382.0

5. S. Korea, 291.6

6. Brazil, 287.1

7. India, 272.9

8. Hong Kong, 268.7

9. Singapore, 225.8

10. Thailand, 163.5, Nov. 2010

11. Mexico, 117.1, Nov. 2010

12. Malaysia, 104.3, Nov. 2010

13. Indonesia, 92.9

14. Poland, 88.8

15. Turkey, 79.1, Nov. 2010

16. Israel, 71.3

17. Philippines, 55.1

source: The Economist, January 20, 2011

Portfolio investments $4.6 B in 2010

There was a big jump in net foreign portfolio investments in the country last year. From only $388 M in 2009, it went up to $4.61 B in 2010.

Inflows was huge at $13 B (stockmarkets $8.5 B + peso-denominated govt securities and peso time deposits $4.5 B), while outflows was $8.4 B (mainly due to withrawals in peso deposits). See the news report last Friday here.

While the change in political leadership after the generally peaceful May 2010 elections contributed to improved business confidence in the country, bad business environment in Europe due to the fiscal crisis of a number of countries there (Greece, Ireland, Portugal, among others) and elsewhere contributed to the “migration”, even temporary, of capital to emerging economies like the Philippines.

168,490 new vehicles in 2010

Last year, the 20 automotive firms in the country sold a total of 168,490 new vehicles, some 27.4 percent higher than 2009 car sales. The top 3 sellers were Toyota, Mitsubishi and Hyundai.

While others may look at this as additional traffic congestion in the country’s roads, this may be viewed better as additional growth in the country’s material wealth.  Cars move people from their homes to their offices, schools and other destinations. Increased mobility among people means increased productivity too.

3.45 M foreign tourists in 2010

The Philippines attracted some 3.45 million foreign tourists last year, according to the Bureau of Immigration. This is almost 20 percent higher than the 2.89 million tourists who came in 2009.

Filipinos who travelled abroad and came back reached 3.47 million last year.  See the news report today here.

While attracting more than 3 million foreign tourists is definitely a good development, this still looks “small” compared to other smaller but more dynamic economies like Singapore and HK, which attract at least 10 million tourists a year.

Ratings upgrade for RP

Moody’s Investors Service has upgraded the Philippines’ credit rating from “stable” middle of last year to “positive” early this year.

There are some good domestic development that contributed to such ratings upgrade, like a stable and low inflation rate (3.8 percent last year), high GIR by the central bank, and so on. But generally negative development in Europe as more governments there are limping fiscally, like Ireland, Greece, Spain and Portugal, may have contributed to some capital flight from Europe to emerging markets like the Philippines.

Thus, the challenge to significantly reduce the annual budget deficit, reduce the overall public debt stock, need to be pursued, to further improve investor confidence in the country.

More Philippine-made ships

A Korean shipbuilder, Hanjin Heavy Industries Corp.-Philippines (HHIC-Philippines), that has facilities in Subic Bay, Zambales, delivered 2 more new ships, Capesize bulk carriers, to its Indian client.

HHIC-Philippines has already delivered 18 ships so far. And will make 61 more deliveries until 2012. See related news today here.

More large ships construction, more job creation, especially high-skilled jobs, are opening to more Filipinos.

More airline liberalization

President Aquino has ordered further airline liberalization in the country known as “pocket open skies”. Expected to come are more foreign budget airlines to enter any of the country’s 10 international airports. See one report today here.

Local carriers like PAL and Cebu Pacific are expected to be given more open skies in other countries too. But more importantly, it will be the local tourism industry — hotels, mountain and beach resorts, restaurants, travel agencies, tour guides, souvenir shops, etc. — that will greatly benefit. And where there is more tourism, more foreign investments will follow.

RP’s 10 international airports

The Philippines now has a total of 10 international airports, those with Customs, Immigration and Quarantine Security (CIQS) facilities. These are:

1. Ninoy Aquino International Airport (NAIA), Pasay City

2. Diosdado Macapagal International Airport (DMIA), Clark Field, Pampanga

3. Subic Bay International Airport, Subic, Zambales

4. Laoag International Airport, Laoag City, Ilocos Norte

5. Mactan-Cebu International Airport (MCIA), Mactan City, Cebu

6. Puerto Princesa International Airport, Palawan 

7. Kalibo International Airport, Aklan

8. Davao International Airport, Davao City

9. General Santos International Airport, General Santos City, Sarangani

10. Zamboanga International Airport, Zamboanga City.