Service industries spur Philippines

Updated 01 February 2013
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Service industries spur Philippines

MANILA: The Philippine economy expanded 6.8 percent in the fourth quarter of last year, lifted by a strong performance from service industries, the government said.
It said the robust growth was led by household spending, helped by low inflation and remittances from millions of overseas workers.
Economists have credited renewed confidence in the Philippines on President Benigno Aquino III’s push to reduce graft and improve governance following a succession of corrupt governments.
For all of 2012, the economy grew 6.6 percent.
Services rose 7.4 percent in 2012, industry was up 6.5 percent and agriculture rose 2.7 percent.

The economy grew a feeble 3.9 percent in 2011.
It still faces challenges, including decrepit infrastructure, rampant poverty and unemployment and low foreign investment.
“Good governance generates confidence that translates to more economic activity,” said Finance Secretary Cesar Purisima, who credits the growth to Aquino’s anti-corruption reforms.
Purisima said for 2013, the government will focus on accelerating the implementation of projects, programs and policies put in place to ensure that growth momentum is sustained.
Socio-Economic Planning Secretary Arsenio Balisacan said the biggest challenge is to address the country’s power problems to allow investments, manufacturing and exports to pick up and have a greater share in the growth that is now led by consumption.
He said the government is seriously addressing the country’s energy requirements, with the aim of raising generation capacity, achieving reliable and adequate supplies and expanding rural utilities.
The Philippines has been dogged by an inadequate power supply due to a backlog in investments in expensive power infrastructure.
It also has among the highest power rates in the region.
Balisacan said massive investments are also needed in the agriculture sector, including farm-to-market roads to improve connectivity, and greater access to credit for farmers.


Air Arabia disclosure draws investor attention to Abraaj fallout

Updated 12 min 25 sec ago
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Air Arabia disclosure draws investor attention to Abraaj fallout

Air Arabia’s disclosure that it was an investor in Abraaj has focused investor attention on other market fallout after the buyout firm filed for voluntary liquidation last week.

Air Arabia shares held steady in Tuesday trading, a day after the stock tanked on the revelation the carrier was exposed to Dubai-based Abraaj.

The Sharjah-based carrier’s shares were slightly higher in afternoon trading, after slumping to an 11-month low on Monday.

It said it had appointed a “team of experts” to ensure the airline’s business interests are protected.

The size and nature of the Air Arabia investment was not disclosed.

“It will reduce the appetite for new venture capital or private equity funds,” said Jaap Meijer, head of equities research at Arqaam Capital.

Abraaj filed for a court-supervised provisional liquidation in the Cayman Islands last week, in a bid to head off petitions by creditors to wind up the firm, following allegations of financial mismanagement.

Abu Dhabi Capital Management, a unit of alternative investment group Abu Dhabi Financial Group, has made a conditional offer to buy Abraaj’s investment management business for $50 million, according to a document reviewed by Reuters.