University of the Philippines economist Benjamin E. Diokno, former Budget secretary from July 1998-January 2001, said that agriculture should be able to grow by 2%-4% this year.

Agriculture Secretary Arthur C. Yap had said in November last year that his department expected the sector to have grown by 3.8%-4.5% last year.

Data from the National Statistical Coordination Board (NSCB) showed that agriculture grew 3.4%, year on year, in the third quarter of 2008, compared to a 3.7% growth in the same period in 2007.

"Actual growth [this year] would depend on weather pattern — whether it’s favorable or harsh — and incentives for farmers to plant crops using high-yielding seeds and fertilizers," Mr. Diokno said.

He added that growth would also depend on more rural infrastructure like irrigation and farm-to-market roads.

Peter Lee U, an economist from the University of Asia and the Pacific (UA&P), shared the same view, saying that "food utilities should continue to be okay as it is a necessity and rely mainly on the domestic market."

Fellow UA&P economist Victor A. Abola said the government’s proposed budget of over P39.7 billion this year for fertilizer, seeds, rehabilitation of irrigation systems, farm-to-market roads and storage facilities should help prod food production.

UA&P’s Center for Food and Agribusiness has projected that agriculture growth would hit 4%-4.5% this year, barring prolonged dry spells, strong typhoons and spikes in fertilizer prices.

Apart from food production, construction is likewise expected to grow this year.

Mr. Abola said that construction should post double-digit growth this year due to increased public infrastructure spending. He noted that the proposed 2009 budget includes a 20% hike in infrastructure spending to prod growth of economic activity amid a global slump.

Mr. Abola added that private construction should also grow due to demand for real estate, particularly residential units by overseas Filipino workers (OFWs), even as retrenchment has started in some economies hosting them.

"BPO [business process outsourcing] will also be positive, with the risk and costs in India leading firms to move to alternative sites like the Philippines," he said, explaining that this would mean increased demand for office space.

Main risk

While Mr. Diokno agrees that public construction could grow this year, he said that there is a risk since the proposed budget for the year has not been approved. Bicameral conference committee debates on the proposed P1.415-trillion national budget this year will start when Congress resumes session this January 19. "The risk is the delay in project starts [sic] as the approval of the budget gets stalled," he said.

NSCB data showed that construction grew 21.3%, year on year, in the third quarter of 2008, compared to the 17.8% growth rate posted in the same period of 2007. Public construction grew by 20% from 11.5% for those comparative periods, as the national government raised infrastructure spending by 52.7% and local governments by 11.2%. Private construction grew 13.8% from 19.5% in the same periods, spurred by demand from BPO firms and OFWs.

Socioeconomic Planning Sec. Ralph G. Recto said in a separate interview that construction and manufacturing would fuel growth this year. "Construction would remain strong due to the strong push for public construction and demand of the BPO sector, as well as OFWs and tourism," he said.

He explained that manufacturing, which grew 4.7% in the third quarter 2008 from 3.7% in the same period 2007, should be able to endure the slowdown this year since slowing inflation would spur domestic demand.

The economy expanded by 4.6% in the third quarter last year. The government expects gross domestic product to have grown 4.1%-4.8% last year, and to expand by a slower 3.7%-4.7% this year.

"The industries that would drive growth for 2009 would depend on how fast, efficient and productive government will spend its budget for the first half of the year," Mr. Recto said.