Gov’t trims 2009 targets

The government has similarly downscaled its economic growth targets for 2009 after revising downwards its growth forecast for 2008, as soaring food and oil prices are likely to cap growth over the next three years.

After announcing the gross domestic product (GDP) growth slowed to 5.2 percent in the first quarter, the government now expects the economy to grow 6.2-to-7 percent from a previous forecast of 6.4-to-7.1 percent.

On the other hand, the government expects the economy to grow at a faster pace of 6.8- -to-7.6 percent in 2010 from a previous forecast of 6.7-to-7.5 percent. 

This as the Development  Budget Coordination Committee (DBCC) has approved the country’s economic growth targets for 2008-2010.

“Given  recent  and  regional  trends,  the DBCC reviewed the macroeconomic assumptions over  the medium-term   period and agreed to set real GDP growth   rates   for   2008 to 2010   at   5.7-to-6.5 percent,  6.2-to-7 percent  and 6.8-to-7.6 percent, respectively, “DBCC  chairman  and  Budget  and  Management Secretary Rolando Andaya Jr. said.

Andaya said that there had been only a slight downsizing in the government’s original growth targets for the medium-term as an offshoot of the prevailing uncertainty in the world economy.

Furthermore, he said  the  revised growth targets were brought about by accelerating   worldwide   inflation  given  higher  food  prices  and the record-high  and  more volatile Dubai crude oil prices caused by supply and demand  concerns.

He also cited the strong peso, which the government expects to stay within the 42-45 to the dollar range, and lower export shipments amid slowing global demand.

The DBCC also expects merchandise exports to grow at a slower rate of six percent this year and next  year  before increasing by eight percent in 2010. Imports likewise are projected to increase by seven percent in 2008 and 2009 and by nine percent in 2010.

“The  government  is  bent  on  balancing  the budget by 2010 to enable the government to sustain the much needed infrastructure and social programs in the  next  two  years  to  provide  for  more  jobs and poverty  alleviation measures in the face of tougher external conditions,” Andaya said.

He also said the Finance  Department  remains  committed  to its P1.2-trillion revenue target  in  2008  to  ensure  that  there are enough resources to cover the programmed spending for this year and the coming years.

The government has said it will spend more this year to help the poor cope with surging food and fuel costs, and that the aim of a balanced budget for 2008 has been pushed back for 2010.