Government scales down growth target to 3.8% this year

The Arroyo administration is scaling down its growth target for this year, especially after last February’s poor export results.

Socioeconomic Planning Secretary Dante Canlas and other members of the economic team of the government who met yesterday with the country’s top donors such as the International Monetary Fund (IMF) and the World Bank to discuss the country’s economic agenda, said government is ruling out its earlier projected "high-end" growth in gross domestic product of (GDP) 4.2 percent and instead, will settle for the "low-end" GDP target of 3.8 percent.

The National Statistics Office reported that for February this year, the value of exports fell by 3.3 percent to $2.805 billion from $2.902 billion last year.

"We may not be looking at the high-end of our growth targets but the lower-end is still achievable," Canlas said. According to him, the growth projections for exports were also scaled down to four percent from the original target of 8.7 percent.

Aside from internal problems, Canlas said the country is also affected by the perceived softening of other economies such as the US and Japan, two of its biggest trading partners.

Local businesses for instance, are still awaiting positive signs from the sagging US economy, the number one buyer of Philippine goods.

"We also are downscaling because of the economic downtrends in Japan and the US which are experiencing their own difficulties," Canlas added.

He said that aside from exports, there are other "drivers" of growth.

"We are looking at other indicators that will provide growth such as construction, real estate, consumer confidence and declining interest rates which should encourage economic activities," Canlas said.