‘OFW inflows, exports to lift economy’

MANILA, Philippines – Socioeconomic Planning Secretary Ralph Recto is optimistic that dollar remittances from overseas Filipino workers (OFWs) and an improvement in the performance of the export industry would help the country achieve the government’s latest economic growth projection for 2009.

“Consumer spending will improve in the remaining part of the year,” Recto said when asked of the chances of meeting the government’s latest economic growth revision.

The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s economic assumptions, downscaled anew the country’s economic growth projection for 2009 to between 0.8 percent and 1.8 percent from the original target of between 3.1 percent and 4.1 percent on account of the larger impact of the global financial crisis.

Recto said the country would benefit from the continued inflows of dollar remittances from overseas Filipino workers who traditionally send money by June for the school opening and before December, ahead of the holiday season.

The National Economic and Development Authority (NEDA) chief said these factors would prevent the economy from slipping into a recession.

The revised economic growth projection would result in a larger budget deficit for 2009 of P250 billion from P199.2 billion.

Finance Secretary Margarito Teves said the government would borrow more to finance the larger deficit.

“Due to lower revenues, there will be an increase in borrowings. We are thinking of an increase in ODA (official development assistance),” Teves told reporters.

He also said that despite the adverse impact of the lower growth on revenue collection, the government would keep its level of spending to help us sustain modest economic growth.

In the first quarter of the year, the country’s gross domestic product (GDP) grew by only 0.4 percent. The economy shrank by a seasonally adjusted 2.3 percent from the last three months of 2008, its lowest level recorded for the past 20 years.

The 0.4 percent is significantly below the government’s first quarter growth projection of 1.8 percent to 2.8 percent and below the adjusted 3.9 percent GDP expansion recorded in the same period last year. –Iris C. Gonzales, Philippine Star