News Room - Business/Economics

Posted on 15 Apr 2009

Philippines may cut '09,'10 growth estimates-official

The Philippines plans to lower its official growth estimate this year to 3.1-4.1% from the previous 3.7-4.4% forecast due to weak exports and rising unemployment, Socioeconomic Planning Secretary Ralph Recto said on Monday.

 

The Southeast Asian country may also cut its 2010 growth forecast to 4.6-5.5% from the previous 4.9-5.8%, Recto told reporters.

 

'The possible loss of income from exports and loss of jobs in the export sector... (have) multiplier effects,' Recto said. 'You have 100,000 people losing jobs that could result in 100,000 people spending less. Remittance growth will probably flat. (These are) the main reasons for the reduction.'

 

'We're just looking at these projections. There might still be a pleasant surprise. I think the lowest growth will be in the first quarter,' Recto said.

 

The Philippines will announce official growth data for the first quarter late next month.

 

The government's lower growth projections this year are still above the estimates of multilateral development agencies. The World Bank expects growth in the Philippines to slow to about 2% this year and the Asian Development Bank at 2.5% against actual expansion of 4.6% last year.

 

The Philippines was now looking at a contraction of 13-15% in exports and 12 to 14% in imports this year, deeper than previous estimates of a decline of 6-8% and 8-10%, respectively, Recto also said.

 

Electronics and semiconductors dominate the country's exports. Total shipments slumped 41% in January from a year earlier, its steepest fall on record, as the global downturn hit demand.

 

The government kept its assumption for oil prices at between US$45 and US$65 per barrel this year based on Dubai crude --the benchmark Manila uses as it imports most of its crude oil needs from the Middle East.

 

With a slowing economy, the government said average inflation would likely remain within its current target of 2.5 to 4.5% this year.

 

The new forecasts would be presented for approval by the country's economic team at a meeting on Thursday, Recto said.