NEDA projects 5-6% GDP growth this year

MANILA, Philippines - The Philippine economy could still grow by five percent to six percent this year despite the difficult global environment, the country’s economic planning chief said yesterday.

In a briefing with reporters, Socioeconomic Planning Secretary Arsenio Balisacan said this year’s growth targets are still within reach for as long as the situation in the euro zone does not worsen.

 “(The five percent to six percent growth target) is doable as long as Europe will not become very bad,” Balisacan said. He warned that if the situation in Europe worsens, this could spread to Asia and affect the country’s export sector.

Europe is facing a difficult period as many of its governments have incurred high debt and are now facing rising unemployment. The European sovereign debt crisis started as early as 2008 and has spread through Greece, Portugal and Ireland.

The United Nations, in a recent report, has warned that if Europe is unable to address the problem, it could lead to social unrest. It said that the euro zone may lose as much as 4.5 million jobs over the next four years.

Balisacan also expressed hopes the situation in China, which is experiencing economic problems, would not worsen.

 “If the euro crisis gets worse and it spreads to Asia, China’s growth would decelerate,” Balisacan said.

At the same time, Balisacan said while the country’s trade with China has grown significantly through the years, the Philippines’ dependence with a single country has diminished.

“Our dependence with any particular country has diminished because we have been able to diversify our markets, our production base,” he said.

When asked if the National Economic and Development Authority (NEDA) would recommend an upward adjustment in the country’s economic growth target for the year following the higher-than-expected first quarter growth, Balisacan said the agency is still monitoring local and global developments.

The economy grew by 6.4 percent in the first quarter of the year, faster than the 4.9 percent growth recorded a year ago.

According to the latest macroeconomic assumptions approved by the inter-agency Development Budget Coordination Committee (DBCC), the Philippine economy is projected to grow six percent to seven percent next year and accelerate to 7.5 percent to 8.5 percent in 2016.

The Aquino administration sees the economy expanding 6.5 percent to 7.5 percent in 2014, seven percent to eight percent in 2015, and 7.5 percent to 8.5 percent by the end of its term in 2016.

The economic growth projections are anchored on expectations that the country’s external trade would fully recover in the next four years.