Economy not taking a back seat to politics, says Neri

Contrary to what some analysts believe, the economy is not taking a back seat to politics, Socioeconomic Planning Secretary Romulo Neri said, recently.

"They are entitled to their own perception which does not necessarily reflect the true economic condition of the country," the country’s chief economic planner said.

Neri admitted that the failed mutiny may have inadvertently affected business confidence in the short-term. He said the slight slippage in the business confidence survey conducted by the New York based Roper-ASW Asia Pacific is expected since the survey was conducted a few days after the unfortunate event.

He, however, emphasized that in the same Business Confidence Index, two subsectors namely: the Futures Expectations Index and the Perception on Overall State of the Economy Over the Next Six Months showed improvements in their indices, rising from 87.5 to 89 percent and 28.7 to 30.3 percent, respectively.

"This implies that businessmen who took part in the survey expect the economic condition to improve," he noted.

Neri said he expects the business confidence level to stabilize as government continues to put in place various reforms to strengthen the economy. Some of these are increasing agricultural productivity, jumpstarting the housing construction sector and lending programs for strengthening micro-small-medium enterprises (MSMEs).

He also said government would be steadfast in the continued implementation of its economic policies such as the Agriculture and Fisheries Modernization Act (AFMA); liberalization of retail trade, oil, banking; procurement reforms in government, Anti-Money Laundering Act (AMLA), the President’s 8-point agenda, and deficit reduction that has moved the economy closer to its growth target.

Neri expressed confidence the government will achieve its GDP growth of 4.2 to 5.2 percent for the year. "We will stick to our ‘pre-mutiny’ GDP target of 4.2 to 5.2 percent for the year," Neri said.

He said GDP growth for the year will continue to depend on strong private consumption, including that of telecommunication products; revival of construction, particularly housing; and resilience of service sectors,"he said.

Neri also pointed out that inflation for July has slowed down to 3.3. percent compared to the 3.4 percent recorded in June. The country’s January to July inflation rate average at three percent remains within government’s target of 4.5-5.5 percent for 2003.

"Government remains on track in meeting its 4.5 to 5.5 percent target for the year," he said.

He added that latest auction of the 91-day T-bill rates remain at 5.1 percent, with a year to date average of 6.1 percent. This is still way below the 8-9 percent forecast for the year. "The benign inflation expected for the rest of the year shall keep interest rates at bay, which in turn , will spur lending activities," Neri noted.

He said exports for June went up 4.2 percent to $3.060 billion from last year’s $2.936 billion. Neri said the significance in the exports growth is that despite a drop in electronics exports, overall exports grew.

"This implies we are moving in the right direction reducing our dependence in electronics as a measure of our exports performance and broadening the base of our export industries.

He also said data from the DOF showed that government revenues increased 14.9 percent to P306.344 billion in the first half of 2003 from P266.522 billion a year ago. The country’s fiscal performance remained on track in the first six months of 2003. Compared to the year ago figure of P119.718 billion, the fiscal deficit this year is 33.5 percent lower.