Economic managers retain ‘conservative’ GDP growth targets

The National Economic and Development Authority’s Development Budget Coordination Committee on Tuesday decided to stick to its “conservative" macroeconomic targets for this year and next year pending the outcome of the sovereign debt crisis in Europe and the economic uncertainty in the U.S.

 

In an interview with reporters, Socioeconomic Planning Secretary Arsenio Balisacan revealed that the economic managers decided to stick with its gross domestic product, or GDP, growth targets of five to six percent for the rest of the year, and six to seven percent for 2013.

 

He explained that the economic managers decided to remain conservative due to the foreign debt situation in Europe and the low income earned from electronic exports.

 

European countries account for about 13 percent of the country’s total export market, while the remittances of overseas Filipino from Europe accounted to about 17 percent of the total remittances.

 

6.4% GDP Growth

 

“The 5.5 percent to 6.5 percent was considered but we decided on the conservative side to have an elbow room for more aggressive stance," Balicasan said.

 

He explained that the government considered raising the growth targets to 5.5 to six percent GDP growth target following the strong 6.4 percent growth posted in the first quarter.

  

Balicasan noted that the dynamic 6.4 percent growth during the first three months of the year, the highest in Southeast Asia and the second highest in Asia, was due to the absence of adverse domestic shocks like typhoons or a drought. 

 

“We expect it (the second quarter) to be within five percent to six percent, higher than six percent is still a possibility as oil prices have gone down externally, while inflation and interest rates are very low," he said.

 

Personal consumption and higher government spending will continue to boost economic growth, he added.

 

2013 budget deficit set at 2 percent of GDP

 

For his part, Budget Secretary Florencio Abad said that his department was geared to present the 2013 proposed budget of P2.006 trillion to President Benigno Aquino III for approval.

 

He revealed that the government hopes to trim the budget deficit to P241 billion or two percent of GDP next year from this year’s P280 billion or 2.6 percent of GDP. — DVM, GMA News