Neda sees growth at 3.1-4.1%

THE National Economic and Development Authority (Neda) sees even slower growth in 2009 and 2010 in light of the possible increase in export-earnings losses and rising unemployment for Filipinos here and abroad as a result of the global economic recession.

Socioeconomic Planning Secretary and Neda Director General Ralph Recto said the agency will be proposing a downward revision to the Development Budget Coordination Committee (DBCC) projections on Thursday.

The official government estimates earlier agreed upon by the DBCC is a gross domestic produc (GDP) growth range of 3.7 percent to 4.4 percent in 2009 and 4.9 percent to 5.8 percent in 2010.

Recto said that based on recent estimates, the Neda now sees GDP growth to be within the range of 3.1 percent to 4.1 percent in 2009 and 4.6 percent to 5.5 percent in 2010. The Neda also sees growth in Gross National Product of 2.8 percent to 3.8 percent in 2009, lower than the 4.2 percent to 4.9 percent DBCC forecast.

“The possible loss of income from exports and loss of jobs in the export sector and the OFW remittances [have] multiplier effects. You have 100,000 people losing jobs that [could result in] 100,000 [people] spending less. Remittance growth will probably be flat. [These are] the main reasons for the reduction,” Recto told reporters on Monday.

“But like I said, it doesn’t mean we’re throwing in the towel. We’re [just] looking at these projections. There might still be a pleasant surprise. I think the lowest growth will be in the first quarter,” he stressed.

Recto said the crisis will likely cut export earnings in 2009. The Neda now projects export earnings will post a contraction of 13 percent to 15 percent, and import payments a contraction of 12 to 14 percent. These projections have also been scaled down from current estimates. The official export earnings growth target for 2009 is a range of -8 percent to -6 percent and imports at -10 percent to -8 percent.

The Neda also sees oil prices staying at the government’s initial estimate of between $45 and $65 per barrel. This, coupled by a low-growth regime, will help keep inflation at relatively low levels of 2.5 percent to 4.5 percent, lower than the central bank’s official estimate of 3 to 5 percent.

Despite the lower growth projection, Recto said that overall, the Neda sees this year and 2010 as a “catch- up” time for the Philippines. Compared to its other Asian neighbors, Recto said the Philippines along with Indonesia, China and India will not be that affected by the crisis and will continue posting positive growth in 2009.

“We will do better than most and we will continue posting positive growth rates,” Recto said.

The Holy Week break, he said, has proven that there are still a lot of Filipinos willing to spend and have the capability to spend, citing the heavy traffic in both the North and South Luzon Expressways and the fact that many resorts in top tourist destinations were fully-booked.

It was thus a welcome respite, especially for small medium enterprises and other tourism-related businesses all over the Philippines, according to him.

Earlier, multilateral agencies gave dimmer growth estimates for the Philippines. The lowest projection came from the World Bank which estimated a 2009 GDP growth of only 1.9 percent. Other multilateral institutions such as the Asian Development Bank see growth to be at 2.5 percent.–Cai U. Ordinario / Reporter, Businessmirror