Govt rules out 2011 growth target

PHILIPPINE economic managers have ruled out meeting their growth target for this year, but said the country’s expansion would continue to outpace that of advanced nations even if the euro zone resolves its debt crisis.

Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. said the better growth prospects in emerging markets, such as the Philippines, will continue to attract investors.

He said the volatile movement in the global market was a result of growing fears about a possible default by Greece and the increasing likelihood of a global recession.

“If your look at the global economic growth, you’ll notice that emerging markets still drive the growth and this is true for 2011 as well as 2012. Although there will be some improvement in the share of advanced economies in global growth next year, the main driver of such growth will still be emerging markets,” Tetangco said.

“This will attract more investors’ appetite, especially that emerging markets are not only growing faster, but their macroeconomic conditions are stable, financial systems are sound, the external liquidity is very adequate and fiscal conditions are clearly much better that what we see in the advanced economies,” he added.

Budget and Management Secretary Florencio Abad said the government is optimistic that the “fighting” target of seven to eight percent growth in gross domestic product next year is possible, as the delays in this year’s spending and Public-Private Partnership scheme have already been settled.

“The slowdown in the spending have already been resolved as well as the delays on the PPP projects which were supposed to take off this year will already kick-in in 2012,” Abad said.

He said the bottleneck in spending had been addressed, after the government’s campaign to eradicate misappropriations and corruption among implementing agencies.

He said government spending “finally” turned the corner as it spent P114.93 billion in August, nearly eight percent higher than the P106.5-billion registered in the same month of last year, thus marking the first positive growth of monthly disbursements in 2011.

“This hopefully starts the reversion [of] the contractions experienced during the previous months. These indicate that our expenditure catch-up plans have started to work in the past two months. Furthermore, we continue to line-up programs and projects that will keep up the acceleration of disbursements in the remaining months of the year well into the first half of the coming year,” the budget chief said.

He said the inter-agency Development and Budget Coordination Committee will meet October 10 to review the macro-economic targets for the year, including the growth target of between 5.5 and 6.5 percent.

Annual growth in the second quarter weakened to 3.4 percent from the previous quarter’s 4.6 percent. “We would meet to review the targets in preparation to our presentation before the Senate,” Abad said.

He said the proposed P1.816 trillion General Appropriations Act of 2012 is on track, and may already be passed in both Houses of Congress before the year ends. –LAILANY P. GOMEZ AND KATRINAN MENNEN A. VALDEZ REPORTERS, Manila Times