NEDA says economy could grow by up to 6% this year

The National Economic and Development Authority (NEDA) said yesterday that the economy, as measured by gross domestic product (GDP), could grow by as much as six percent this year.

NEDA Director General and Socioeconomic Planning Secretary Romulo Neri told reporters that NEDA is keeping its 4.2-to 5.2-percent growth forecast but said government is "looking for ways" to push this year’s growth even higher.

Neri made this projection despite the government’s non-expansionary budget plan for 2003 which some economists said could slowdown GDP growth to only 3.5 percent this year.

Saddled with serious problems in revenue flow, the government is struggling to contain its budget deficit which is expected to hit P202 billion this year.

Businessmen, on the other hand, expressed their concern about Neri’s pronouncement, pointing out that they haven’t even come to terms with the 5.6- percent GDP growth reported by NEDA for 2002.

While Neri stopped short of detailing where the growth would come from, he expressed optimism that domestic production is packing enough momentum to sustain the growth posted in 2002.

"We’re looking for ways to bring growth higher," Neri said. "But we’re keeping the forecast where it is."

When told of Neri’s target, Finance Secretary Jose Isidro Camacho exclaimed "What? This year?" He said the official projections are not likely to change but said it was up to NEDA to figure out ways to accelerate production.

For his part, Philippine Chamber of Commerce and Industry (PCCI) vice president Donald Dee said that the 5.6-percent growth in 2002 was entirely possible, but it was due to one factor only: The Malampaya natural gas plant that went into commercial production for the first time last year.

He said the multi-billion dollar natural gas facility single-handedly jacked up the growth performance of the mining and quarrying sub-sector which had contributed much of the growth recorded last year.

For growth to trickle down, Dee said the economy should expand by at least 5.5 percent and this expansion should be broad-based. "You can’t expect anything to trickle down over a broad base if your growth is coming from only one source," he said.

On the other hand, Philippine Exporters Confederation (Philexport) president Sergio Ortiz-Luis said the business sector is only beginning to come to terms with NEDA’s economic report.

"We’ve only just been clarified on the confusing growth figures for last year," Ortiz-Luis said. "We still have to examine what they are saying will be the growth projection for this year."