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Gov’t to revise economic targets

04/23/2008

A Bangko Sentral ng Pilipinas (BSP) official disclosed yesterday the possibility of changes in the government’s economic targets next month given the current adverse global economic situation.

BSP Deputy Gov. Diwa Guinigundo told reporters that inter-agency development budget coordinating committee (DBCC) will review for the first time this year its economic assumptions this month. Another review is set in the second half of the year.

He raised the possibility of a reduction in the government’s 6.3 percent to 7-percent gross domestic product (GDP) target for the year.

“The downward revision is due to the fact that with the global slowdown expected with the various regions across the world there could be a 0.03 to 0.05 (percentage points) downward revision in the real GDP growth of 6.3 percent to 7 percent,” he said.

Last year, the economy posted a 7.3-percent full-year growth, a feat after three decades.

Guinigundo said inflation, which has zoomed to 6.4 percent last March, might not be changed since its rise is due to supply-side factors.

For this year, the government targets inflation between a range of 3 percent to five percent, as announced two years ago, while target for 2009 is a range of 2.5 percent to 4.5 percent, announced last year.

Guinigundo said their inflation for this year was made on the premise that oil prices is not on its current figure, thus, “we expect that these shocks coming from global front will impact the inflation forecast in 2008.”

“In other words, the upside risk is predominant as the downside risk as far as inflation is concerned,” he pointed out.

Exports growth target for this year is 8 percent, imports, 9 percent; balance of payments, $3.4 billion; gross international reserves, $37 billion; peso-dollar exchange rate, 42-45 against a dollar.

Guinigundo said these figures are “subject to review in the light of what happened globally and regionally in the last three months.”

“We need to incorporate the new developments in our projections,” he added.