OECD says PHL unlikely to meet 2018 economic target

The Philippines may not be able to meet its economic growth target this year and the next due to weak exports, the Organisation for Economic Co-operation and Development (OECD) said Tuesday.

OECD has pegged Philippine growth at 6.7 percent this year, the organization’s head of Asia Desk Kensuke Tanaka, said in a press briefing.

The Duterte administration target has set a growth target of 7 to 8 percent.

“Government spending and public investment will likely anchor economic growth, with private consumption facing some friction and exports substantially weakening,” OECD said in an update on its Economic Outlook for Southeast Asia, China and India report.

Paris, France-based OECD is an international intergovernmental organization that measures and studies productivity and global flows of trade and investment.

“I think one of the issues we see is exports, and also infrastructure. These two are maybe the key to growth especially for the Philippine economy. We currently think 6.7 percent, but there might be upside and downside risks depending on how the government copes,” Tanaka told reporters in Quezon City.

The Philippine statistics office has reported that the trade deficit widened by 47.62 percent in May, as import receipts continued to outpace exports which registered a 3.8-percent decline.

This, Tanaka said, could be a downside risk to the Philippines achieving its 7.0 to 8.0 percent goal this 2018.

A similar view

“I would say the difference is very small. More or less we might have a similar view, but it depends on various factors. For instance, domestic demand in general is strong, but it depends too on the extent that export is recovering, or maybe infrastructure can be conducted,” Tanaka noted.

Earlier on Tuesday, the government said it was still optimistic about meeting its economic growth target this year.

“In Q1 2018, GDP growth further accelerated to 6.8 percent. The country remains as one of the best performing economies in the region in the first quarter,” Socioeconomic Planning Secretary Ernesto Pernia said in a budget hearing at the House of Representatives.

“Moreover, the economy continues to undergo structural transformation. Investments contributed as much to growth (3.9 percentage points) as household consumption did during the first quarter,” he said.

Pernia believes the economy is poised to expand at an annual rate of 7.0 to 8.0 percent until 2022.

“With these growth rates, the economy will expand by 50 percent by 2022 from its base in 2016.”

“Likewise, per capita income is projected to increase from $3,550 in 2015 to at least $5,000 in 2022,” he said. —VDS, GMA News