The government rejected yesterday the World Bank’s economic growth projections for the Philippines this year and for 2009, saying that the country’s gross domestic product (GDP) is still likely to expand within the 4.1 percent to 4.8 percent projection for 2008 despite the global financial turmoil.
The World Bank said the Philippine economy would grow by only four percent this year and three percent in 2009 after posting a three-decade high of 7.2 percent in 2007 because of the global economic slowdown.
Socioeconomic Planning Secretary Ralph Recto said the World Bank’s four percent projection for the year was too conservative.
“We already did 4.6 percent in the third quarter and in the first nine months. Growth will be higher than four percent in 2008,” Recto told The Star.
The National Economic Development Authority (NEDA) chief said that as seen in the heavy road traffic the past weeks, people are spending for the Christmas season.
“Many people are spending so chances are we will grow from 4.5 percent to 4.6 percent this year,” Recto said.
He also said that easing oil prices also slowed down the rise in prices of consumer goods.
For 2009, Recto said the government’s 3.7 percent to 4.7 percent growth projection is still “ a fighting target.”
He said there are certain conditions that the government needs to put in place to meet the GDP growth projections for 2009.
“If we do all these, we can grow possibly higher than the World Bank’s projection. We can grow within the 3.7 percent to 4.7 percent projection.
For instance, Recto noted that there was need to boost quick infrastructure projects or those that do not have right-of-way issues.
This, he said, would be possible if Congress passes the P1.415 trillion 2009 budget as soon as possible so that it could be released within the first two months of the year and help fund vital infrastructure projects.
Aside from the budget, Recto said the government and the private sector could also tap the P100-billion crisis fund earlier proposed by President Arroyo.
The government and the private sector have agreed to work together to raise the P100 billion which could be lent to businesses.
Recto said the P100 billion crisis fund could be tapped by companies such as the Maynilad Water Services Inc. and the Manila Water for expansion projects.
“These infrastructure projects should help improve the delivery of water services in the country and lower the rates,” he said.
In its latest half-yearly assessment of the region’s economic health, the World Bank said policy makers should look at the global financial crisis as an opportunity to establish or strengthen well-targeted social safety nets to protect the poor as well as boost domestic demand.
The report says that the region, including the Philippines, entered the current crisis substantially better prepared than they were for the 1997 Asian financial crisis.
Weakening exports and reduced levels of investment and consumption will constrain developing East Asia to an overall 8.5 percent growth rate in 2008 and 6.7 percent in 2009, the World Bank said.
The report expects the Philippine economy to remain resilient and stresses that the direct impact on the Philippine banking system from the turmoil has been marginal. Overall exposure to structured products is estimated at about 2 percent of banking assets, it also said in its report.–Iris C. Gonzales, Philippine Star