Government may be forced to downscale targets

Government may be forced to downscale its growth targets following a weak first quarter performance, according to a top Cabinet member.

Dante Canlas, head of the National Economic and Development Agency (NEDA), forecasts a 2.3 to three-percent economic growth in the first three months of the year. However, a revision may be in the offing as the manufacturing sector had shown poor results.

"The gross domestic product (GDP) growth target for this year is only 3.8 percent. We may have to revisit that after we get the actual figures," Canlas, who is also Socio-Economic Planning Secretary, said.

Exports of garments and electronics, the country’s top two export products, have not met expectations. This has led to an overall poor output by the manufacturing sector due mainly to the snail-like pace of the Japanese and US economies.

However, the services sector has been performing well, somehow offsetting the poor performance of the manufacturing sector. The services sector, led by the wholesale and retail trade and the transportation, telecommunications and storage, is expected to grow by a healthy 3.5 to four percent.

The Department of Agriculture (DA) recently reported that the sector may have grown by 2.29 to 2.4 percent due principally by the strong production results of the corn and livestock industry.

Earlier, the World Bank, the Asian Development Bank and the International Monetary Fund in separate statements see the Philippine economy growing by an optimistic three percent.

The ADB earlier said the growth forecast for the economy will remain in the three-percent level as the world economy, including the US and Japan, will weigh heavily on the earlier forecast of four percent made by the Philippine government. Fiscal performance continues to fall short of expectations, with the national fiscal deficit rising to P136.1 billion or 4.1 percent of GDP in 2000, more than twice the government target.