RP’s economic woes to continue this year — report

Despite government assurances, last year’s political crisis will continue to adversely affect the economy this year, with most of the "better" scenario goals appearing to be "worse" than the actual values in 2000, according to a local brokerage house.

A report by PCCI Securities and Brokers Corp. described the National Economic and Development Authority’s (NEDA) revised targets as "reasonable as reference values."

"The better values of the ranges assume that the impeachment process extends until the first quarter of 2001 only, while the worse assume a longer period before resolution," PCCI research head Gonzalo Bongolan said.

For gross domestic product (GDP), the government is aiming for a three to 3.5-percent growth under the better scenario. Under the worse scenario, GDP growth is expected to hit only two percent this year.

For gross national product (GNP), the growth targets are set at a range of 3.2 percent to 3.7 percent under the better scenario and 2.5 percent under the worse scenario.

Other targets under the NEDA’s worse scenario are 10 percent inflation and 18 percent yield for 91-day Treasury bills. In addition, the budget deficit could expand to P180 billion and the exchange rate could touch P55:$1.

"The GDP/GNP target growth rate is a slowdown compared to last year, as government recognizes that agriculture will stabilize at slower growth and exports may just match or even be lower than last year’s performance considering the deceleration of US economic growth and continued stagnation in Japan — the two biggest markets for Philippine products," Bongolan said. — Conrado Diaz Jr.