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THE
International Monetary Fund (IMF) has scaled down its
growth forecast for the Philippines’ gross domestic
product this year to 4.4 percent from 5.2 percent
announced in June, given bleak prospects for exports and
high inflation.
In its
latest World Economic Outlook, the IMF predicted that
advanced economies would be in or close to recession in
the second half of 2008 and early next year. This means
more troubles for Asian exporters, with the United
States a key market for them.
“More
weakness is expected ahead in response to slowing demand
from advanced economies and growing strains in regional
financial markets,” the IMF said.
Issued
ahead of the annual meetings of the IMF and World Bank
in Washington, the report said investments in the region
are also expected to moderate, mainly because of
deteriorating export prospects.
The IMF
expects consumption in the region to ease because of
still-high food and fuel prices, although it sees
subsidies likely cushioning the impact on consumers’
purchasing power.
“Growth
in the region is projected to moderate to 7.7 percent in
2008 and 7.1 in 2009 from 9.3 percent in 2007,” it said.
But it
said, “the risks to the outlook are firmly on the
downside.” The main concern, it said, “is that a buildup
of stress in the global financial system and a
sharper-than-anticipated global slowdown could further
weigh on activity.”
The
IMF’s revised growth forecast for the Philippines is
lower than the already-reduced projection of the
government.
Last
week Socioeconomic Planning Secretary Ralph Recto said
growth for the Philippines’ GDP this year might slow to
a range of 4.5-4.7 percent from last year’s strong
7.2-percent expansion.
The
government’s latest growth forecast took into account
the possible recession in the US.
Bangko
Sentral ng Pilipinas Governor Amando Tetangco Jr. has
said a 4.7-percent growth “should still be respectable
given the many challenges facing us.”
Despite
the grim outlook for the US economy, Philippine exports
may still grow by 3 percent to 5 percent this year,
according to the Philippine Exporters Confederation Inc.
(Philexport).
Sergio
Ortiz-Luis, president of Philexport, recently said the
forecast for this year already took into account the
developing crisis in the US and the shipment orders that
were already made.
“Weakening external demand is likely to weigh on
exports, but, in some cases, the impact may be mitigated
by still-loose macroecononic policies and currency
depreciation,” the IMF said. |
