Economy catching up with neighbors’
By Joel Guinto
First Posted 22:12:00 02/24/2009
CLARK FIELD, Pampanga, Philippines — The Philippine economy continues to grow, albeit slightly slower than previously projected, and is therefore “catching up” with others in the Southeast Asian region that are in contraction, the secretary of economic planning said here Tuesday.
The government will lower its growth forecast for 2009 “slightly” but not to an extent that would worry the financial markets, Secretary Ralph Recto said in this special economic zone north of Manila.
Recto gave no figures but said that the revised forecast of growth in the gross domestic product (GDP) would be higher than those of credit ratings agencies and higher than those of other countries in the region.
He also said the government could raise its target limit for the budget deficit ceiling to 2.0 percent of the GDP, which he said would be “acceptable” to the markets.
“We don’t expect interest rates to significantly increase” because of a projected bigger deficit, Recto said. “The two percent is factored in, the way I see it,” he said.
The current GDP growth forecast is 3.7-4.7 percent, and the target ceiling for the budget deficit is 1.2 percent of the GDP, or P102 billion.
“There will be slight reduction” in the GDP forecast but “not enough to scare the market,” Recto said in an interview after a Cabinet meeting here.
“We’re catching up with our neighbors,” he said. “There might be slowdown here but there’s a slowdown everywhere. In their case [it’s economic] contraction. We don’t have contraction.”
Recto said there would also be revisions in other economic targets, which will be revealed during the government’s annual economic briefing this Wednesday.
President Gloria Macapagal-Arroyo will be the keynote speaker at the briefing.
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