2013 targets likely to be raised–NEDA

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Category: Top News

Published on Tuesday, 25 June 2013 22:10

Written by Cai U. Ordinario

The government is likely to revise the country’s growth targets for 2013 on the back of the economy’s performance in the first quarter and the strong macroeconomic fundamentals.

At the sidelines of the media briefing on the Philippines Climate Public Expenditure and Institutional Review (PH-CPEIR) on Tuesday, Socioeconomic Planning Secretary Arsenio M. Balisacan, however, made it clear the government was still in the process of crunching the numbers.

The Development Budget Coordination Committee (DBCC) is the interagency committee tasked to set the country’s macroeconomic targets. The chairman of the committee is Budget Secretary Florencio B. Abad and the co-chairman is Balisacan, who is also National Economic and Development Authority (Neda) director general.

“Why not? If it’s good for the economy, why not? [But] the targets, basically, [require us to] look at the fundamentals, look at the impact of the various sectors. For example, your target affects your revenue generation and also affects your spending programming so hindi basta-basta pinapalitan lang ’yan [it cannot just be changed],” Balisacan told reporters.

One of the possible growth drivers would be the peso, whose depreciation allows overseas Filipino workers (OFWs) to realize gains as the higher peso equivalent their dollar remittances would increase their spending power.

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This would enable them to spend more, which would significantly contribute to household consumption, one of the major drivers of the Philippine economy. The Bangko Sentral ng Pilipinas (BSP) recently reported that cash remittances from OFWs coursed through the banking system grew by 5.7 percent in the first four months of the year to $6.9 billion.

The strong remittance inflow was cited by Balisacan in a previous forum as one of the factors that could boost the country’s full-year gross domestic product (GDP) to exceed 7 percent.

Apart from remittances, Balisacan noted that the economy was now stronger, so much so that external shocks do not easily affect GDP growth. Balisacan said, “a good part of our growth is domestic.”

“Our macroeconomic fundamentals are pretty solid. The real sector of the economy, the real fundamentals are very strong so we are not as vulnerable as we used to be in the 1980s or even in the 1990s,” Balisacan said. 

The National Statistical Coordination Board (NSCB) attributed the 7.8-percent GDP growth in the first quarter of 2013 to the “upbeat business and consumer sentiment” and strong government consumption. 

The first-quarter growth is the highest so far under the Aquino administration and also the third consecutive quarter of more than 7-percent GDP increments.