Camacho sees 4% growth in Q1

Supported by brisk agricultural production and consumer spending, the first quarter gross domestic production (GDP) is expected to grow by 3.6 to four percent and the Arroyo administration said it has no intentions of reviewing its economic targets until the first semester is over.

The forecast was made by Finance Secretary Jose Isidro Camacho. His numbers are slightly lower than the forecast made by Socio-Economic Planning Secretary Dante Canlas who said domestic production is likely to grow between 3.8 and 4.3 percent in the first quarter.

Camacho said he is basing his forecast on the leading indicators for agricultural production and sales report for the first quarter which he said supported expectations that the GDP would be on track with the targets set by the Arroyo administration.

Camacho also added the administration is sticking to all its economic targets and it is not planning to even review, let alone revise, any of its numbers until it sees how the economy would perform in the second quarter of the year.

"It’s way too early to do anything," Camacho told reporters over the weekend.

"We have agreed not to touch anything, including our fiscal targets, until after the second quarter."

Camacho said the Department of Finance (DOF) sees no need to review the government’s expenditure program, even after the government missed its programmed deficit for the first three months by over P8 billion.

"We will meet the P130-billion [deficit target for the year]," Camacho said as he pointed out that the economy is picking up.

Canlas said earlier that there was cause for optimism that the economy would be growing better than expected although economists remain cautious over the sustainability of the US economic recovery.

Canlas said there are indications of improving economy reflected by a marked improvement across all three economic sectors–agriculture, industry and services.

Canlas said leading indicators show marked growth in the agriculture sector, which is expected to expand by over four percent during the first three months. According to Canlas, palay production is projected to provide much of the momentum in the agriculture sector and the continuation of favorable weather conditions will propel an increase in output.

The industry sector is also expected to best its first quarter performance of 1.6 percent in 2001. Canlas said the sector will draw strength from the improvement in manufacturing and construction.

Canlas explained that declining interest rates have finally managed to have an impact on construction while manufacturing is projected to recover in tandem with the better-than-expected performance of the country’s export winners, specifically electronics and semiconductor.