Economy to remain precarious in 2010

The global economy remains unpredictable, National Economic Development Authority (Neda) regional director Ma. Lourdes Lim speaking at the economic briefing conducted by government economic managers in Davo City said.

Lim said although the local economy remained resilient compared to other Asian countries, “we still see volatility in the economy this year compared to last year.”

The projected volatility has pushed the national government to tighten up on fiscal targets, she said.

Lim said recovery in crude oil prices in the world market might put some pressure on consumer prices mainly from increases in utility rates.

She also said that the changing climatic conditions such as the El Niño, the building up of fiscal deficits, accumulating public debt, and a stronger recovery of the country’s Asian neighbors would have a negative impact on the Philippines.

She said the Philippines was one of the few countries in the world that enjoyed consistent positive gross domestic product (GDP) quarterly growth rates in 2009 along with China and Vietnam despite the global crisis.

The positive growth can be attributed to the government’s timely implementation of accommodative monetary policy and fiscal stimulus packages, which included the infrastructure spending strategies of frontloading, and realigning from slow moving to fast moving projects, implementation of quick-disbursing projects, implementation of lower corporate tax rates and personal income tax exemptions, implementation of various strategic social programs under the Economic Resiliency Plan and the Comprehensive Livelihood and Emergency Employment Program which provided almost 500,000 jobs or livelihood assistance nationwide, Lim said.

The economic managers, including Lim, highlighted the 1.8 percent growth of the country’s GDP in the fourth quarter of 2009. They also reported the 3 percent growth of GDP during same rating period. This was mainly due to a 20.1 percent increase in net factor income from abroad, resulting to a strong inflow of remittances from overseas Filipinos.

Services sector led the economic growth followed by agriculture. –Daily Tribune