...the growth projection (2)

Philippines eyes 6% growth despite China, oil worries

AFP News

07 March 2012

 

 

 "...the Philippines was firmly on track for its 5-6 percent GDP growth target this year." - Ruperto Majuca, Assistant Director-general, National Development Office for Planning

The Philippines will hit or top its growth target of 5-6 percent this year despite rising oil prices and China's forecast of slightly slower economic expansion, officials said Tuesday.

Central bank governor Amando Tetangco and other officials said China's 7.5 percent gross domestic product (GDP) growth target this year, from 8.0 percent last year, was not a cause for concern.

"While the growth projection has been downscaled, they can still beat that target," he told a news conference.
"If that's the case then there won't be any significant impact," he said, adding that some deceleration had been expected.

Announced by Premier Wen Jiabao on Tuesday, the new target remained substantial for a large economy despite the "temporary" jitters it caused on financial markets, said Tetangco.

Ruperto Majuca, assistant director-general of the economic planning ministry, said the Philippines was firmly on track for its 5-6 percent GDP growth target this year.

"We will probably hit the higher end of our forecast, and we will not be surprised if we will exceed it," Majuca added.

Vivek Arora, the International Monetary Fund representative in the Philippines, said GDP growth should recover to 4.2 percent this year, from 3.7 percent last year.

Higher government spending, robust salary remittances by millions of Filipinos abroad, and supportive monetary conditions will be key, he told a conference call.

"So far we see the authorities' policy focus as appropriate in the sense that macro policies are supporting growth while keeping inflation manageable," Arora added.

Tetangco said that despite the surge in oil prices amid tensions over Iran's nuclear programme, the Philippines remained on course for 3-5 percent inflation this year.

"The current assumption is oil prices of between $90-110 (a barrel) for the whole year," he said.

They would have to spike to $150-160 per barrel, for the outlook to change, he added.

The government announced Tuesday inflation slowed to 2.7 percent in February from a revised 4.0 percent in January.

Tetangco said this vindicated the central bank's move to cut its key interest rates by a full percentage point this year.