Government set to revise downward growth forecast for this year

MANILA, Philippines - The government is set to revise downward the economic growth forecast for the year given the global economic recession, Socioeconomic Planning Secretary Ralph Recto said yesterday.

“There will be a slight reduction in gross domestic product,” he told reporters yesterday.

He said that chances are the government will revise downward the higher end of its gross domestic product (GDP) growth target range of 3.7 percent to 4.7 for 2009 because of the difficult global economic tide.

“Chances are the higher end of the target range will be adjusted. It’s possible we can still grow by four percent,” Recto said.

He said that while the dollar remittances from overseas Filipino workers (OFWs) are expected to slow down, the country could still record a positive growth in these dollar inflows.

The Bangko Sentral ng Pilipinas (BSP) expects dollar remittances from OFWs to grow anywhere from six percent to nine percent.

Recto said the difficult external environment would also severely affect the export sector. 

The interagency Development Budget Coordination Committee (DBCC), the group that sets the country’s macroeconomic assumptions, met on Friday to revise the numbers given the negative impact of the global financial turmoil on the Philippines.

DBCC officials said government economic managers would be announcing the latest changes during the economic briefing on Wednesday.

Government sources said the DBCC has recommended a downward revision in the collection targets of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

Originally, the BIR is tasked to collect P968.3 billion this year from a goal of P845 billion last year. Earlier, BIR deputy commissioner Nelson Aspe said the agency likely collected only P785 billion in 2008.

The BOC, for its part, has a revenue goal of P317 billion for 2009 as against the P254.4 billion-collection target for last year.

The yearend budget deficit target is also expected to swell to P161 billion or two percent of GDP from the already revised ceiling of P102 billion.

Exports are expected to contract by eight percent this year from a previous growth target of one percent to three percent.

The Philippine economy, as measured by GDP grew by 4.6 percent last year, from a 30-year high of 7.2 percent recorded in 2007 as the country struggles to grow amid a global financial crisis.

The 4.6 percent growth for 2008 is within the DBCC’s revised economic growth assumption of 4.1 percent to 4.8 percent for last year and slightly above the National Economic and Development Authority’s (NEDA) initial estimate of 4.2 percent to 4.5 percent.