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Philippines - The Manila Times - Govt Cuts Economic Targets for Remaining Three Years Print E-mail

Monday, January 07, 2008

Govt cuts economic targets for remaining three years

By Darwin G. Amojelar, Reporter

THE National Economic and Development Authority (NEDA) has reduced the Philippines’ economic targets under a revised blueprint for the years 2008 to 2010.

Acting Socioeconomic Planning Secretary and NEDA Director General Augusto B. Santos said the macroeconomic targets earlier approved by the Development and Budget Coordinating Committee (DBCC) will be incorporated in the updated Medium Term Philippine Development Plan (MTPDP) for 2008 to 2010.

“We have [been] instructed [by the President] to update the MTPDP at least for the remain[der] of her term up to 2010,” Santos said Friday after the agency’s meeting on the plan’s review.

He said the new macroeconomic assumptions should be consistent with the DBCC’s new forecast.

The new MTPDP’s gross domestic product (GDP) targets for year 2008 to 2010 are set at 6.3 percent to 7 percent, 6.4 percent to 7.1 percent and 6.7 percent to 7.5 percent, respectively.

The updated targets are much lower than the original MTPDP targets of 6.8 percent to 7.8 percent this year, and 7 percent to 8 percent for 2009 and 2010.

Gross national product (GNP), which is a wider measure of economic performance as it includes net factor income from abroad, is seen to grow at a faster pace of between 7.2 percent and 8 percent this year, 7.5 percent and 8.2 percent in 2009, and 7.9 percent and 8.6 percent in 2010.

The DBCC’s new forecast for GNP is higher than the original MTPDP targets of 6.8 percent to 7.8 percent this year, 7 percent to 8 percent both for next year and 2010.

The updated blueprint has assumed the peso to average 42 to 45 to the dollar next year until 2010 compared with the old plan’s 55 to 57 exchange rate assumption from 2008 to 2010.

For oil, the NEDA expects Dubai crude to cost $80 to $90 a barrel this year until 2010 from an average $28.04 under the old plan.

On exports, the new plan sets an 8 percent growth next year and in 2009, before climbing to 10 percent in 2010. Under the original blueprint, a 12 percent expansion this year and 2009 and 13 percent in 2010 had been forecast.

Imports are seen growing at 9 percent this year and in 2009 and 11 percent in 2010, lower than the original plan of 13 percent this year and 14 percent next year and 2010.

Average price increases are seen at 3 percent to 4 percent this year, and between 3.4 percent and 3.6 percent for 2009 and 2010 because of higher oil prices.

Under the original plan, the inflation rate is expected at 3 percent to 4 percent this year up to 2010.

Santos also said that Malacañang has instructed NEDA, the agency tasked with drafting the MTPDP to get comments and recommendations from the top chief executive officers in the country on the MTPDP 2008-2010.

“We will be having a consultation meeting with them [CEOs] maybe about second week of this month,” he said adding that the government will try to invite Lucio Tan, Manuel V. Pangilinan, the Aboitizes, Sorianos, Ayalas, Sys, among others.

“It’s an instruction to get the views and comments of the top CEOs and the final consultation is the presentation of the revised updated MTPDP to the Cabinet NEDA board sometime end of this month,” the NEDA director general said.

He said that it is the firs time that the government will be consulting CEOs in one meeting.

“It was a desire on the part of the government that MTPDP, the development plan for the entire country, [should] get the views, comments and recommendations of the top CEOs of this country. When you say the entire country it is composed of not only the government but also the private sector,” he said.

(Source: The Manila Times, 2008)

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