Economy seen to grow by 3.8%-4.8% in 2011

MANILA, Philippines – The government expects the economy to grow anywhere from 3.8 percent to 4.8 percent next year, buoyed by a recovery in exports and imports, according to the latest estimates made by the Development Budget Coordination Committee (DBCC).

The 3.8 percent to 4.8 percent economic growth projection for 2011 is above the growth assumption for this year of 2.6 percent to 3.6 percent.

Exports are expected to grow anywhere from 12 percent to 14 percent next year from the expected growth of 11 percent to 13 percent this year.

Imports, meanwhile, are expected to grow from 16 percent to 18 percent in 2011 from the projected 17 percent to 18 percent growth for this year.

The DBCC, the interagency group that sets the country’s macroeconomic assumptions and targets, will meet on Thursday to finalize next year’s budget.

Finance Undersecretary Gil Beltran said the DBCC also expects next year’s budget gap to be narrower than the P293-billion budget deficit ceiling programmed for this year.

“The deficit will be smaller because the economy is growing faster so we will need less stimulus spending,” said Beltran.

Beltran said that while the DBCC has yet to announce next year’s budget gap, it is definitely “lower than 3.6 percent of gross domestic product (GDP).”

However, the DBCC has yet to make a final recommendation on moving the balanced budget goal to 2016 instead of 2013.

Originally, the government had planned to wipe out the budget deficit by 2010 but moved this to 2013 because of weak revenues.

In the area of privatization for instance, the government has yet to sell any of the three major big-ticket items it has been planning to sell for many years now. These include the P13-billion Food Terminals Inc. agro-industrial property in Taguig, the assets of Philippine National Oil Company-Exploration Corp. in the Malampaya project, estimated at P14 billion to P15 billion and the long-term lease and development contract of the government’s real estate property in Fujimi, Japan for P3 billion.

In the first quarter of the year, the government’s budget gap hit P134.2 billion, above the P110-bilion deficit ceiling for the period and the P119.7 billion budget gap recorded in the same period last year. –Iris C. Gonzales (The Philippine Star)