Despite endless "political noises" haunting the country, the slowdown of the U.S. economy and the surging oil prices in the international market, the Philippines is getting a higher-than-expected economic growth in 2007.

    "The national economic growth forecast is 6.1 to 6.7 percent, but I think that the GDP (gross domestic product) growth can reach seven percent for the whole year since things are going well," said Augusto Santos, acting director-general of the Philippine National Economic and Development Authority, in a press release of the third-quarter national income accounts at the end of last month.

    The strong outturn of 6.6 percent output growth in the third quarter put GDP growth in the first three quarters of 2007 at 7.1 percent, the highest rate in the past three decades, Santos said.

    According the National Economic and Development Authority, the main source of growth this year continued to consist in the Services sector, followed by the Industry sector and the sectors of Agriculture, Fishery and Forestry. In terms of contribution to GDP growth, Services contributed 4.4 percentage point to the 6.9-percent growth in the first quarter; 4.1 to 7.5 in the second quarter; and 3.6 to 6.6 in the third quarter.

    Besides, the government took measures to deploy overseas workers and develop the industry of business process outsourcing (BPO), making full use of Filipinos' language advantage to export labor forces and bring in new job opportunities.

    The hottest spot of Services proved to be BPO, which is expected to end this year with more than 300,000 jobs and revenues of about 4.5-5 billion U.S. dollars from 3.3 billion U.S. dollars last year, according to Oscar Sanez, chief executive officer of the Business Processing Association of the Philippines.

    The BPO industry has been an encouraging field for job creation. It boosted employment from 2,400 to 237,400 between 2000 and 2006,and has the potential to grow more. The industry is targeting another 40-percent growth next year on the back of strong demand for back office, engineering and financial services, Sanez said.

    Apparently, the government's efforts in economic development have proved fruitful. Earlier this year, the Asian Development Bank (ADB) revised its forecast for the country's growth to 6.6 percent from 5.4 percent in 2006, and to 6.0 percent in 2008. The bank attributed the expansion mainly to private consumption, which accounted for more than three quarters of GDP and grew by 6.0 percent in the first half of the year, underpinned by an 18.1-percent rise in remittances from overseas workers.

    There are more than eight million Filipinos, or around 10 percent of the population, who work overseas and remit a large amount of U.S. dollars back to their homeland. The OFW (overseas Filipino workers) remittances, fueling a local spending boom, are estimated to hit 14.7 billion U.S. dollars this year.

    The OFW remittances have been contributing much to the continued appreciation of the peso, the local currency which hovered at 42.35 pesos per dollar recently from the 48-peso level at the onset of the year, helping the government save on interest payments.

    The strong peso, according to the acting director general, largely offset the impact of higher import prices, especially surging oil prices in the international market and eased the inflation domestically. ADB forecast that the full-year inflation will be as low as 2.9 percent in the Philippines this year.

    The other side of the coin was that the strong peso affected the beneficiaries of OFW remittances, exporters and other dollar earners. The central bank of the Philippines posted 685 million U.S. dollars worth of losses in foreign-exchange transactions in the first nine months.

    As the fourth quarter of the year is the long Christmas season in the Philippines, where people started to decorate their houses and the streets as early as in October, analysts anticipated that the country's economy will sustain its robust pace although "political noises" are likely to continue.