The government plans to scale down growth targets this year due to the Mindanao conflict, Finance Secretary Jose Pardo admitted yesterday.
"We may have to tighten the estimates on GDP and GNP," Pardo said. The GDP (gross domestic product) refers to total final goods and services produced in the country for a given period. GNP (gross national product) is GDP plus remittances of overseas workers.
It was the first time since the conflict in Mindanao that a senior member of the President's economic management team admitted that the Mindanao problem, which has spread to Metro Manila with the recent bombings of two shopping malls, would hurt economic prospects this year.
On Monday, Bangko Sentral Gov. Rafael Buenaventura downplayed the war in Mindanao, noting that it does not contribute much to the GDP. He said in areas where there were armed conflict, its output only constitutes about two percent of GDP.
"It's too early to review the targets. This situation could be temporary," Buenaventura had said.
But Pardo said the government is now considering this possibility as the conflict has taken a bit longer to resolve.
GNP and GDP, the two leading indicators of the country's economic performance, should grow by 4.5 to 5.5 percent and four to five percent respectively.