Saturday, 3 April 2010

NEDA mulls hiking 2010 growth target

Manila Bulletin

The National Economic and Development Authority (NEDA) will probably recommend raising the 2010 growth target by the middle of the year amid improving exports and remittances.

“There is strong evidence that recovery prospects are solidly entrenched,” NEDA Director Dennis Arroyo said in interview. The government had forecast growth to accelerate to between 2.6 percent and 3.6 percent in 2010 from last year’s 0.9 percent, an 11-year low. NEDA is the central economic planner.

Growth in Asian economies from China to Indonesia is accelerating as the global recovery from the worst postwar recession boosts the region’s exports. Overseas remittances will climb 8 percent this year, faster than the Philippine central bank’s 6 percent forecast, Moody’s Investors Service said in a report Friday. It kept a stable outlook on the nation’s Ba3 debt rating, and expects growth at the top end of the government’s target.

“Growth is nascent and will have to be nurtured by low interest rates, which we can afford to have because inflation is contained,” said Marcelo Ayes, a senior vice president of Rizal Commercial Banking Corp. in Manila. “Remittances and business process outsourcing, which is a form of exports, support the economy.”

Bangko Sentral ng Pilipinas this month kept its benchmark interest rate unchanged at a record-low 4 percent for the sixth straight meeting to support the recovery. Authorities are unlikely to increase borrowing costs in the first half of 2010 to avoid endangering an economic rebound that’s just starting, Governor Amando Tetangco said March 22.

The Philippines’ $167 billion economy expanded 1.8 percent last quarter from a year earlier, accelerating from a decade-low 0.4 percent in the previous three months. Economic Planning Secretary Augusto Santos said March 22 the economy probably expanded by between 2 percent and 3 percent this quarter.

Any changes to the current target may be considered some time in June, when the nation has elected a successor to President Gloria Arroyo, the NEDA planner said.

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