DBCC expects economy to grow by 2.6-3.6% next year

MANILA, Philippines – The economy may grow anywhere from 2.6 percent to 3.6 percent in 2010, the Development Budget Coordination Committee (DBCC) said yesterday.

Next year’s economic growth projection is higher than the revised projected growth range for the year of 0.8 percent to 1.8 percent.

With gross domestic product (GDP) projected at a range of 2.6 percent to 3.6 percent for 2010, the DBCC approved a budget of P1.541 trillion for next year.

This is P115 billion or eight percent higher than the 2009 budget of P1.426 trillion and is consistent with the goal of reducing the budget deficit to 2.8 percent of GDP from 3.2 percent of GDP in 2009, Budget Secretary Rolando Andaya said.

The budget deficit for 2010 is expected to hit P233.4 billion from P208 billion previously, the DBCC said.

Finance Secretary Margarito Teves said the proposed P1.541 trillion budget for 2010 would be used to finance social services.

“The proposed 2010 budget shows our commitment to fiscal consolidation. This means further reduction in our debt burden and more resources to fund the urgent needs of our people such as quality education and health services,” he said.

Outgoing Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) director general Ralph Recto said the budget also takes into account another economic stimulus package of roughly P200 billion, smaller than the resiliency package for this year of P330 billion.

“Because of unprecedented stimulus packages unleashed around the world, we have entered into an era of recovery. There is, thus, less need for pump priming. Fiscal and monetary policies are yielding fruit and we expect resurgence in private sector activity next year,” Recto said.

Andaya, for his part, said that “the DBCC is on track to meet the deadline mandated in the Constitution to submit the budget to Congress within 30 days after the President’s State of the Nation Address.”

In June, the DBCC agreed to raise the budget deficit to P250 billion or 3.2 percent of GDP from P199.2 billion or 2.5 percent of GDP which was approved in April.

The DBCC also scaled down the projected GDP growth for 2009 to a range of 0.8 percent to 1.8 percent from the previous range of 3.1 percent to 4.1 percent. –Iris C. Gonzales (The Philippine Star)