NEDA maintains 2002 targets

Despite expectations of a slight recovery in electronics exports plus improvements in overall domestic production and an inflation rate that is expected to be well under control, the government is not as yet revising its economic growth targets for the current year.

The National Economic and Development Authority (NEDA) said the electronics sector has been making more optimistic projections in sharp contrast to initial pessimism at the beginning of the year.

NEDA Director General Dante Canlas told reporters that the Semiconductor and Electronics Institute of the Philippines Inc. (SEIPI) projected that electronics exports would grow between 10 and 15 percent this year.

Overall, Canlas said 2002 exports are expected to improve by one to 1.5 percent, a dramatic improvement from a 15-percent decline last year.

"Thus far we see no change in the manufacturing sector but we have been getting reports from the semiconductor industry indicating that the situation there is getting better much faster than we had originally anticipated," Canlas said.

Canlas qualified the development as a "weakening of the decline" in the export sector in general, expressing guarded optimism over its sustainability that could possibly lead to a definite recovery.

Government had originally estimated that the export sector would pack enough strength to at least go up to zero growth instead of declining for two consecutive years. "It appears that the situation might be improving," Canlas said.

Moreover, Canlas said there was possibility of revising the government’s inflation targets for 2002 as prices continued to remain stable. He said agriculture production was expected to be on track, ensuring that the country’s food supply would be stable and prices would not make any dramatic moves.

At present, the full-year inflation rate is five to six percent but Canlas said a lower range between 4.5 to 5.5 percent was feasible. "We are considering the possible downscaling of inflation target," he said.

In February, Canlas said inflation rate was projected to be at around 3.9 percent, year-on-year.

Despite these indications, however, Canlas said it was unlikely that the government would be revising its economic growth target now at four to 4.5 percent. At the very least, he said these latest estimate would only allow the economy to reach the upper limit of the target range.