Published on September 26, 2013, BusinessWorld Online:
THE NATIONAL Economic Development Authority (NEDA) is hopeful that the Philippines will exceed economic assumptions for 2013, an official said yesterday.
“Our goal is to sustain if not surpass our growth performance.” NEDA Deputy Director-General Rolando Tungpalan said, in a speech at a convention hosted by the Subdivision and Housing Developers Association (SHDA) yesterday.
“We are also positive that we can take advantage of opportunities such as improving global economic environment particularly the sustained grow in emerging markets in Asia,” Mr. Tungpalan said.
The Philippine economy expanded by 7.6% in the first semester, more than the 6.4% growth recorded in the same period last year and exceeding the government’s 6-7% target this year.
Growth in the supply side of the economy was seen in services, contruction, finance, real estate and tourism, according to Mr. Tungpalan. On the demand side, more investments in equipment contributed significantly to growth.
The NEDA official said, however, that the present challenge for the Philippines is to improve social outcomes, particularly in job creation and poverty reduction.
Housing in particular is seen to be a strong economic driver. According to Mr. Tungpalan, the real estate industry sustained steady growth in recent years. On average, the share of construction in the country’s gross domestic product is about 6%.
“It was estimated that every P1 worth of construction generates P2 worth of economic activities.” the NEDA official said.
He also said that 2011-2012 housing-related construction generated 2 million jobs and that housing contributes to inclusive growth. Housing remains a top priority sector in the Philippine Development Plan, according to Mr. Tungpalan.
Housing units increased to 211,009 last year compared with 180,140 units in 2011. The nationwide value from housing grew from P100.22 billion to P120.37 billion in 2012, a report from SHDA stated.
“While our economy is growing at an average of 6-7% annually, the growth of housing is almost three times that, indicative of the significant multiplier effect of the housing sector has on the economy.” Paul Tanchi, SHDA president, said at the convention.
However, the organization listed these as factors that make increased production difficult: uncertainty of tax holidays for mass housing, inaccessibility and inadequacy of government housing finance for lower and mid-income segments, varying and even conflicting land use policies, and other issues regarding land titles, building permits and licenses for housing projects.
Philippine Vice-President Jejomar C. Binay, also chairman of the Housing and Urban Development Coordinating Council, noted in his speech that titling and availment of incentives is difficult for the private sector.
“We are also aware that the policy changes that we made, such as the revision of guidelines in the compliance with the balanced housing requirement, somehow necessitated adjustments on how the private developers were doing things,” Mr. Binay added. — MLVA