Economy to grow at least 3 percent next year — PCCI

12/06/2008

Philippine business leaders said yesterday economic growth next year would slow to three percent amid the global financial crisis, which would mean more people out of work.

But, Sergio Ortiz-Luis, chairman of the Philippine Chamber of Commerce and Industry, did say “growth will not go below three percent.”

The latest official gross domestic product (GDP) growth projection for 2009 is 3.7 percent.

The economy expanded by 4.6 percent in the nine months to Sept. 2008. Exports over the same period rose four percent.

Ortiz-Luis expects salary remittances by millions of Filipinos working overseas to remain strong, and some exports to rise despite the recession in developed countries.

“While others are in decline, we are still growing,” he told reporters.

Although electronics and semiconductors, the country’s main export products, had suffered declines, other sectors had taken up the slack, Ortiz-Luis said.

“What is important is we keep growing, no matter how little the growth,” said the chamber president Edgardo Lacson.

While heavy job losses may be avoided, he conceded it was doubtful that many of the estimated one million Filipinos who will join the labor force in 2009 would find jobs.

“We will not be able to generate the employment for the new entrants,” he said.

Another chamber official, Miguel Varela, said 2009 will be “a very challenging year.”

He said the government must help through spending more on infrastructure and other state projects. He and his colleagues said overseas remittances and “a relatively stable banking system” would help.

Philippine inflation eased to 9.9 percent in November as economic activity slowed, the National Statistics Office (NSO) said yesterday.

This brought the inflation rate for the first 11 months of the year to 9.4 percent, the NSO said in a statement.

Slower price rises in the heavily weighted food, beverage and tobacco items in the index, along with those for fuel, light, water and services, led to the downtrend, it added.

Inflation had stood at 11.2 percent a month earlier and 3.2 percent a year ago.

Core inflation, which excludes volatile food and energy items, picked up slightly to 7.9 percent in November compared to 7.8 percent in October, the NSO said.

The Philippine economy grew at a much slower pace of 4.6 percent in the nine months to September, compared to 7.2 percent for the whole of 2007.

The Bangko Sentral ng Pilipinas (BSP) expects wider monetary policy options following the further deceleration of the inflation rate.

In a text message to reporters Friday, BSP Gov. Amando Tetangco Jr. said the continued decline of the rate of price increases nationwide “is indeed a pleasant surprise as it provides greater monetary policy space.”

He noted that there was slower inflation rate in all items under the consumer basket.

“Month-on-month inflation actually sustained a decline while core inflation appears losing steam,” he said.

This development, the BSP chief pointed out, “should encourage lower market rates and boost economic activity by the private sector.”

“That should also increase confidence in the foreign exchange and equities market,” he added.

The BSP yesterday announced that gold and dollar reserves held by the Philippines rose slightly to $36.2 billion as of end-November, from $36 billion in the previous month.

A surge in the price of the precious metal, a fresh Asian Development Bank loan and income from BSP investments abroad were offset by payments of maturing government obligations.

The current reserves level can cover 5.7 months’ worth of imports of goods and payments of services, and is equivalent to 3.7 times the country’s short-term external debt, the BSP said in a statement.

AFP and PNA

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