Gov't keeps near-term growth targets

MANILA, Philippines - This year’s growth targets— which have already been exceeded— have been retained by the government, which wants to be “conservative” in their assumptions as the global economy remains fragile.

“We kept the growth targets both for this year and the next,” Budget Secretary Florencio Abad told reporters after a meeting by the inter-agency Development and Budget Coordinating Committee (DBCC) Wednesday. Abad is DBCC chairman.

The Aquino administration has set a five- to six-percent growth target this year and six- to seven-percent next year. However, this year’s goal was already surpassed after the government reported that growth for the third quarter reached a surprising 7.1 percent.

This brought growth for the first nine months to 6.5 percent.

Socio-economic Planning Secretary Arsenio Balisacan said growth could average "between six to seven percent" this year, way higher than the dismal 3.9 percent recorded last year as a result of weak exports and state under spending.

“We want to be more conservative as there remains weakness in the global economy,” Balisacan told reporters.

Exports and imports are targeted to grow eight and seven percent this year, respectively. These assumptions were down from 10 percent and 12 percent seen in July, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said.

As of September, exports grew 7.7 percent while imports inched up 0.5 percent.

For next year, exports and imports goals have been reduced to 10 percent and 12 percent, respectively, from 12 and 14 percent forecast four months ago.

“We expect imports to pick-up next year,” Guinigundo said.

Foreign direct investments (FDI), meanwhile, are expected to reach $1.5 billion net inflow this year, up from $1.2 billion originally as “due to good feedback from investment promotion agencies,” the deputy governor said. FDI, which amounted to $1.038 billion as of August, could reach $2.2 billion in 2013.

Remittances from overseas Filipinos are still forecast to expand five percent this year, Guinigundo said. Year-to-date tally of $15.571 billion already represents a 5.5-percent increase.

As a result of the revisions, the country's balance of payments (BOP) — which summarizes all external transactions— could notch a $6.8-billion surplus, up from $2.6 billion original forecast. BOP already reached $6.435 billion surplus as of October.

Meanwhile, the government still targets to cap its budget deficit ratio at 2.6 percent and two percent this year and the next, Abad said.

Those are equivalent to budget shortfalls of P279.1 billion and P241 billion, respectively. As of the third quarter, the deficit has been contained at P106.062 billion.