'RP likely hit lower end of 2009 growth target'

MANILA, Philippines - Bangko Sentral Governor Amando M. Tetangco Jr. said the Philippines likely achieved the lower end of its economic growth target last year as the country escaped recession despite the “Great Crisis” that left the global economy in a shambles.

In a breakfast meeting of the Tuesday Club at the Edsa Shangri-La Hotel at which he was the special guest, Tetangco said the country’s economic growth was closer to the lower end of the gross domestic product (GDP) growth target of 0.8 percent to 1.8 percent due to the natural calamities.

“It (GDP growth) was closer to the lower end of the range because of the typhoons,” he stressed.

Tropical storm Ondoy in September and typhoon Pepeng in October battered the country and left widespread floods and destruction in key cities and municipalities.

The country’s GDP growth slackened to 0.7 percent in the first three quarters of last year from 4.2 percent in the same period in 2008 due to the full impact of the global economic slump.

However, Tetangco reiterated that the Philippine economy was relatively unscathed by the global financial crisis after it avoided recession unlike other economies. “What is important is that we escaped recession,” the BSP chief stressed.

According to him, reconstruction of the damages caused by the natural calamities would stimulate economic growth this year as the GDP is expected to grow between 2.6 percent and 3.6 percent.

 “2010 started unlike 2009. 2009 was full of uncertainties and gloom while 2010 is full of hope,” he added.

He pointed out that the global economy has turned around with the International Monetary Fund (IMF) projecting a GDP growth of 3.1 percent this year from a negative growth of 1.1 percent last year.

 “There is an improvement in the assessment of global recovery. It is expected to be gradual and not rapid,” he said.

The BSP chief said fiscal and monetary reforms adopted by the National Government helped cushion the full impact of the financial crisis that led to a worldwide economic slump.

At the height of this crisis during the last quarter of 2008, he said the BSP endeavored to prevent such a meltdown in financial markets and a freezing in the credit markets from occurring.

With these measures, he said, lending activities continued, domestic financial markets stabilized, and the banking system remained sound.

“There is reason to expect that the Philippine economy will be on the way to recovery and the banking sector will be safe and sound,” he concluded.