ADB trims RP growth forecast for this year

The Asian Development Bank (ADB) has scaled down its growth forecast for the Philippines’ gross domestic product (GDP) from four percent to just 3.2 to 3.8 percent.

The ADB said that the Philippines remains one of their worst clients in terms of loan disbursements.

In a press briefing yesterday, ADB country director for the Philippines Tom Crouch said the scaled down forecast was influenced by the slow pace in economic growth, negative impact of the SARS, and the country’s inability to utilize approved loans by multilateral agencies.

The National Government has set a 4.25- to 5.25-percent GDP growth target.

Crouch said the National Government had been making headway in its revenue collections but still tagged the country’s fiscal imbalance as the "Achilles heel" of the economy.

"Management of the budget deficit has become the primary barometer for assessing the government’s ability to deliver," the ADB director added.

Meanwhile, the ADB expressed dissatisfaction over the inability of the Philippines to utilize approved loans amounting to $1.8 billion. Of the total, only $700 million has been utilized varying degrees by the different government agencies.

"The Philippines is one of ADB’s largest loan portfolios, yet it is also one of weakest in terms of implementation."

The ADB and the National Government have reviewed and decided to "cancel" some of its existing program loans. It had already scrapped the $175-million Grains Sector Development Program (GSDP).

Other loan programs that may be cancelled, downscaled or restructured are in the areas of infrastructure, agriculture, capital markets, health, environment, and airports. Five airport projects in Mindanao with an approved financing of $93 million may be downscaled to $5 million. However, $10 million had already been tapped.

"The program is the worst performing loan program in the Philippines," Crouch said.