Government closely monitoring economy

MANILA, Philippines – The National Economic and Development Authority (NEDA) said the government is closely monitoring the current economic situation and will revise its growth projections when there are “hard numbers” to back it up.

“The Development Budget Coordination Committee (DBCC) and the economic managers are closely monitoring global economic developments including indicators from global partners like the multilateral organizations. These help the Committee to prescribe economic policies that support positive Philippine economic growth amid turbulent global economy,” NEDA officer-in-charge Rolando G. Tungpalan said.

He added that the DBCC considered the lower world output projections of these multilateral organizations as well as flat growth for overseas Filipino remittances in 2009, lower projections for external trade, and lackluster performance of the manufacturing sector in assessing the growth forecasts.

“Nonetheless, these assumptions show that the economy is still expected to post a positive growth rate, and the government is undertaking initiatives to ensure that this level of growth is realized,” he said. The DBCC has reduced gross domestic product (GDP) growth assumptions to 3.1 to 4.1 percent, from 3.7 to 4.4 percent.

Tungpalan said recent economic data have so far outpaced the latest conservative assumptions of the DBCC. “Remittances still managed to grow by 4.9 percent in February 2009, and deployment of overseas Filipino workers (OFWs) even posted growth of 30.2 percent compared to 25.3 percent in January this year.

Meanwhile, the NEDA officer-in-charge also said that the export sector is affected by the global trade decline. He said exports which are projected to contract by 13 to 15 percent while merchandise imports are expected to decline by 12 to 14 percent.

“To help exporters, government is pursuing the establishment of a Supply Chain City with Clark and Subic as pilot areas. This is expected to be replicated in other ecozones to complement the country’s strengths in manufacturing and services, widen exporters’ base with competency interventions under RIPPLES or Regional Interactive Platform for Philippine Exporters, and push for continued market diversification, product repositioning, enterprise readiness, as well as procedural and governance reforms,” Tungpalan said.

He added that the Philippine economy is also starting to benefit from the government’s economic stimulus measures implemented early this year. These measures include accelerated spending for infrastructure projects where actual first quarter 2009 disbursements for infrastructure spending and other capital outlays grew by 73.5 percent and the early release of budgetary funds with agriculture and social services as priority sectors, among others.  

“The government is maximizing the use of budgetary funds through the ‘use-it-or-lose-it’ policy. As a result, important cash resources are being injected into critical infrastructure projects that create jobs and support economic activity.

Construction is seen to be a growth driver for 2009 as the government focuses on the implementation of fast-moving infrastructure projects under the Economic Resiliency Plan.  Other sources of growth are the business process outsourcing (BPO) industry and tourism,” he said.