‘Philippines faces rough economic road ahead’

MANILA, Philippines – The worst of the global economic crisis may be over, but the Philippines still faces a rough road ahead, officials said Friday.

Dennis Arroyo, director for policy and planning of the National Economic and Development Authority (no relation to President Arroyo), said the economy still needs to address a number of problems such as high oil prices, dry spells, a weak dollar, a swelling budget gap, and dwindling power supply.

These, he said, are major roadblocks to the country’s full economic recovery this year.

“We (still) have a fragile recovery, a subdued growth,” Arroyo told ABS-CBN News.

“Some of the threats are really outside our control. (For instance) it’s difficult for us to influence prices of oil,” added Presidential spokesperson on economic affairs Gary Olivar.

The government is expecting the Philippine economy to expand between 2.6% and 3.6% this year. The target growth range is higher than the country’s gross domestic product last year, but is lower compared to forecasts made by most analysts and multilateral organizations.

Think tank GlobalSource Partners, for one, is expecting a 3.7% growth for the Philippines this year on the back of strong consumer spending, an anticipated recovery in exports, and election-related activity.

“Though the economic momentum seems uninspiring at the moment, we expect continued recovery going forward,” it said in a report released Thursday.

An election year usually sees a rise in consumer spending as populist policies and spending by political parties infuse money into the household sector and generates jobs, albeit only temporarily.

Aside from poll spending, economists have said that typhoon reconstruction efforts are likely to boost economic activity in the Philippines this year. Report from RG Cruz, ABS-CBN News