Extraordinary economic growth at the regional level?
The title of this column is a fair question to ask, in the light of the 7.5 percent growth in Gross Domestic Product (GDP) for the second quarter of 2007 that was recently announced by Pres. Gloria Macapagal-Arroyo. From newspaper accounts, the media and some prominent economists were surprised by the announcement.
From an objective standpoint, economists have analyzed the source of the growth and have pointed to government spending (13.5 percent) and capital formation via construction (18.9 percent) as the main reasons for the high growth rate.
The question then is: did Eastern Visayas also experience high growth rates in government spending and construction in the second quarter of 2007 (which coincided with the election)? (GRDP figures won’t be available until next year).
We do not have data on this yet, but with the large-scale construction projects now being implemented in Samar and Southern Leyte, we can safely say that we did.
Given the above, we can say that this extraordinary growth was also experienced in this region.
Another question that comes to mind is: will such a high growth rate be sustained in the second half of the year.
I can see the answer to be depending on two factors, given that the agriculture sector is doing fairly in Eastern Visayas, and these are: (1) continued inflow of government funds for infrastructure projects, (2) a positive response in private investments and exports.
If any of the above does respond positively, we can’t sustain the high growth rate.
We can say that, we can get (1) easily since government funds both local and national are already programmed, but will (2) be attainable?
Hopefully government spending will encourage investments to come in. Right now this seems to be possible in trade and tourism.
Extraordinary growth at the regional level in 2007? It is highly probable.
Now, about the “trickle down” or the “sharing” of such growth? That will be the subject of next week’s column.
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