Targets maintained

MACROECONOMIC ASSUMPTIONS and fiscal targets for this year and 2014 were retained yesterday by economic managers as they chose to keep a “conservative stance” on growth goals.

“We’re keeping our 2013 and 2014 targets and assumptions. Basically all targets [were] not touched,” Budget Secretary Florencio B. Abad told reporters at the sidelines of yesterday’s Development Budget Coordination Committee (DBCC) meeting at the Budget department’s headquarters in Manila.

“I don’t think the volatility has really settled, so the position of the DBCC is to take a conservative approach. Although of course the US and Japan are [our] top trading partners and while we are seeing improvements in their situation, we have not seen it stabilize to a point where we can be confident and make adjustments in our growth assumptions,” Mr. Abad said.

Socioeconomic Planning Secretary Arsenio M. Balisacan told reporters separately that the global economic outlook is still “uncertain.”

“Like for example, China — I don’t know where China is headed. Although the US appears to be recovering, that’s still not very firm. The euro zone is still limping — we don’t know how the problem there will get resolved…so we’re still being conservative,” he said.

In a meeting in November last year, the DBCC had set the country’s economic growth goals for 2013 and 2014 at 6-7% and 6.5%-7.5%, respectively. Economic growth ended well above the lower end of the target last year at 6.8%. The country was off to a good start this year, as gross domestic product (GDP) expanded by 7.8% in the first quarter, beating market expectations and the government’s full-year goal.

Mr. Balisacan said the government is “quite optimistic” on this year’s growth, with second-quarter expansion likely to be “good” in the absence of major storms. “It’s likely to be a continuation of the first quarter, where we saw the industry’s growth, particularly manufacturing, to be quite robust. Construction likely also remained robust. Private construction, consumption, remittances have continued to increase,” he said.

DBCC’s other projections are:

• industry growth of 6.6-7.6% this year and 7.4-8.6% next year;

• service sector expansion of 6.3-7.3% this year and 6.5-7.4% for 2014;

• 10% export and 12% import growth for this year;

• a budget deficit cap of 2% of GDP for this year and next, nominally equivalent to P238 billion and P266.2 billion, respectively;

• a $4.4-billion balance of payments surplus this year; and

• a 5% increase in remittances from Filipinos abroad.

Asked on the 2014 budget, Mr. Balisacan said DBCC is still finalizing amounts, noting “it’s at P2.268 trillion as of today,” 13.1% more than this year’s P2.006 trillion.

Mr. Abad said the 2014 budget will be presented to President Benigno S.C. Aquino III on Monday and submitted to Congress by July 23. –Bettina Faye V. Roc, Reporter, Businessworld

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