Gov’t revises growth, inflation targets for next year

The government has revised its growth and inflation targets for next year.

According to Bangko Sentral ng Pilipinas Governor Rafael B. Buenaventura, the gross domestic product target range has been narrowed to between four to 4.5 percent in 2001 from the earlier projected range of four to five percent.

Gross national product (GNP) is now also targetted at a narrower range of between 4.2 percent to 4.7 percent from the original range of 4.5 percent to 5.5 percent.

Inflation, Buenaventura said, is expected to range anywhere from six to 6.5 percent instead of the broader projection of 5.5 percent to 6.5 percent.

Buenaventura said the revised targets, Buenaventura said, were already presented and discussed with the International Monetary Fund (IMF) which accepted the revised figures.

Buenaventura also revealed that as a consequence of its inability to complete the current standby program, the government stands to lose anywhere from $800 million to $1 billion in loans that were tied to the IMF program.

Buenaventura assured that for this year, government would be able to meet or stay within its projected growth and inflation targets despite the current situation.

He gave assurance that the steep fall of the peso would not yet impact on inflation this year but would be felt next year.

The government is still discussing other features of the economic program with the IMF which has sent a mission to the country to review the current program and to discuss a successor program.

Buenaventura said that government is still bent on just getting a post monitoring program from the IMF that would not involve any fund assistance. Such a program would be less stringent on the economic targets.

It is almost certain that the current standby program will not be completed this as the deficit target of P62.5 billion will be surpassed.

Based on figures presented to the IMF, the expected budget deficit this year has been adjusted upward to P90 billion.

The IMF has said that it is not allowing any upward adjustment of the deficit target and that government must meet the P62.5-billion budget deficit if it wants to draw on the last and final tranche.