RP economy to do better in 2nd half: ADB

MANILA – The Philippines is seen to perform better in the second half of the year, especially after posting a positive growth during the worst of the global downturn.

Unlike most nations in the Asian region, the Asian Development Bank (ADB) said the economy still managed to grow 0.4% in the first 3 months of the year mainly because of its low dependence on global trade as well as the government’s expanded stimulus package and the central bank’s lowered interest rates, which encouraged Filipinos to continue spending even in a time of crisis.

The drop in merchandise exports eased to 27% in May from declines of 30% to 40% in the previous months, causing economists to say that exports have already bottomed out. The fall in imports has also slowed to 24.3% in May compared to decreases of more than 30% since November last year.

As the effects of the global crisis start to ease, the multilateral lender said the Philippines, along with 3 other countries in Southeast Asia, should start to strengthen by the second half of 2009 and grow moderately by 2010.

“Economic activity among ASEAN-4 countries (Indonesia, Malaysia, Philippines, and Thailand) should start to strengthen from the second half of 2009. Indonesia and the Philippines, which are both less reliant on exports, managed to maintain some positive growth during the worst of the global downturn,” ADB said, saying that Malaysia and Thailand have been more severely affected by the crisis as they rely more on external demand.

Despite this, however, the ADB said it may lower its previous 2.5% growth estimate for the country as remittances from overseas Filipino workers may not stay robust. Remittances in the past months have still been growing, but the pace of growth has slowed to less than 5% compared to double-digit increases in the previous years.

The multilateral lender earlier projected the economy to expand by 2.5% this year due to weakened global demand for the country’s goods and services. At that time, the ADB’s forecast is lower than the government’s estimate of at least 3.7% of gross domestic product (GDP) growth.

Last month, however, the government downscaled its growth targets to a range of 0.8% to 1.8%, following the economy’s dismal 0.4% GDP growth in the first quarter. –Karen Flores, abs-cbnNEWS.com