NEDA keeps growth target

THE National Economic and  Development Authority (NEDA)  on Friday said the Philippines’ economic growth target this year would remain despite expectations of a hard hit from the El Niño phenomenon.

The Development and Budget Coordination Committee (DBCC) expects the economy, as measured by the country’s gross domestic product (GDP), to grow between 2.6 percent and 3.6 percent.

GDP is the amount of final goods and services produced in the country.

Acting Socioeconomic Planning Secretary and NEDA Director General Augusto Santos said this growth projection “has already factored in the possible damage of prolonged drought to the agriculture and the utilities [particularly energy and water] sub-sectors.”

The Department of Agriculture had reported that the total crop damage caused by the lingering dry spell already reached P3.77 billion.

Santos said the possible loss of jobs, which could affect household incomes and consumption, was also incorporated in the analysis.

“Notwithstanding the negative implications of El Niño, the projected growth for this year is anchored on the expected gradual recovery of both the industry and services sectors,” he said, adding that these sectors account for about 32 percent and 50 percent, respectively, of GDP.

Santos said the conservative assumptions on the growth of these sectors took into consideration the adverse effects of possible power and water shortages, the fragile world economic recovery, and the measures by government to mitigate the effects of a prolonged drought.

Such measures include the rehabilitation of existing irrigation facilities, water rationing to the most affected areas, the distribution of irrigation pumps, and cloud seeding, he said.

He also said that NEDA is closely coordinating with concerned agencies like the DA, the Metropolitan Waterworks and Sewerage System, the National Water Resources Board, the National Irrigation Administration and the Philippine Atmospheric, Geophysical and Astronomical Services Administration.

“We engage in the timely exchange of information with them as they implement appropriate policies to lessen the impact of the drought,” the NEDA official said.

“NEDA will continue to monitor the developments on the effects of El Niño together with other macroeconomic indicators. We will keep up discussions with the DBCC on government’s macro assumptions and will apprise the public and various stakeholders should there be a need to revise the growth target for the year,” he added.

In 2009, Philippine GDP grew by 0.9 percent, at the low-end of the official target range of 0.8 percent to 1.8 percent.

GDP growth last year was the weakest since 1998, when the Philippines contracted due to the combined effects of the Asian financial crisis and an El Niño. –DARWIN G. AMOJELAR Senior Reporter, Manila Times