RP gets pledge for new ERP

THE World Bank said it will financially support the Philippines’ second economic stimulus package for next year.

Bert Hofman, country director of the Washington-based lender said, “If there’s an opportunity, we are delighted to support the Philippines.”

Hofman said the lender can support a wide range of projects in the Philippines, including the proposed Economic Resiliency Plan 2 (ERP2).

Outgoing Socioeconomic Planning Secretary Ralph Recto earlier said the proposed economic plan for next year initially dubbed as REAP (Reloading Economic Acceleration Plan) will protect the gains made under ERP and prepare the country for the economic rebound.

Recto earlier said that the REAP may cost about P200 billion.

Last Monday, Hofman and Recto discussed a number of projects, including the government’s fiscal program next year.

The World Bank official said its Country Assistance Strategy for 2010 to 2012 amounting to between $700 million and $1 billion provides flexibility to respond to the Philippines’ requirements.

For this year, the government has set aside P330 billion for the ERP, or about 4.1 percent of gross domestic product (GDP).

An indicator of economic performance, GDP is the amount of final goods and services produced in a country.

The ERP aims to save and create jobs; protect the poorest of the poor, returning overseas Filipino workers and workers in export industries; ensure low and stable prices to support consumer spending; and enhance competitiveness in preparation for the global rebound.

Data from the National Economic and Development Authority (NEDA) showed that of the P94.71-billion budget for infrastructure projects committed in January by four agencies, only 41 percent, or P38.8 billion was disbursed as of July.

Agencies that were supposed to frontload were the Departments of Public Works and Highways (DPWH), of Transportation and Communications (DOTC), of Agriculture (DA), and of Education (DepEd).

The planned front loading and spending for the first half of this year was expected to boost private sector confidence in the economy.

Of the P62.79 billion to be disbursed in the first half, DPWH spent only 36 percent as of July 17, while the DOTC, 11 percent as of June 30.

The DA disbursed 67 percent as of June 30, while DepEd spent 50 percent as of July 24.

Malacañang had ordered agencies to spend 60 percent to 80 percent of the productive portion of their allocation in the first half of the year, with particular focus on infrastructure to stimulate the economy this year.

For this year, the Development and Budget Coordinating Committee (DBCC) trimmed the country’s GDP growth goal to between 0.8 percent and 1.8 percent this year from the previous 3.1 percent to 4.1 percent.

For next year, the DBCC predicted that Philippine GDP would expand between 2.6 percent and 3.6 percent, lower than its previous projection of 4.3 percent to 5.3 percent. –Darwin G. Amojelar, Senior Reporter, Manila Times