UN regional arm forecasts lower Philippine growth

MANILA, Philippines - The Philippines’ economic growth will fail to meet government expectations since its exports have reached record lows, the United Nations’ regional arm said on Thursday. The Philippines is set to grow by “no more than three percent this year," the United Nations Economic and Social Commission for the Asia and the Pacific (Unescap) said, citing its latest Economic and Social Survey of Asia and the Pacific. Besides being lower than government’s growth expectations, Unescap’s estimate is less than half of the country’s expansion in 2007, a banner year for the Philippines. The government is seeking to boost economic growth this year between 3.7 percent and 4.4 percent. In 2008, the Philippines' gross domestic product, the sum of all goods and services produced within the country, was 4.6 percent and 7.2 percent in 2007. “The slowdown in the GDP growth in the Philippines is a result of a sharp contraction of exports started in the last quarter of 2008 – a consequence of the country's linkages to global supply chains in the electronic industry, which have been badly hit by the recession in the United States and other industrialized countries," Unescap said. In the first month of the year, Philippine exports dropped by some 40 percent, reflecting the weakening global demand. Although domestic demand remained steady in 2008, Unescap said the growth in private consumption, gross fixed investment, and public consumption was slower in 2008 than the year before. Remittances also maintained its momentum as last year money sent home by Filipinos living and working abroad improved 13.7 percent. However, the growth rate in remittances decelerated to 0.1 percent in January 2009 compared to the same time last year, reflecting the impact of the recession on immigrant workers in the United States. The study also emphasized that although the government is seeking to boost the economy through a $330-billion fiscal stimulus package, “fiscal resources are limited and today's increases in budget deficits will eventually need to be addressed". Former National Treasurer Leonor Briones, who is also a lead convenor of Social Watch Philippines, said poverty is exacerbated by a corruption-ridden bureaucracy. "We don't just have a triple crisis," she said. “We have quintuple or even sixtuplet crisis because we have a government crisis which is linked to a very dangerous political developments. We have a moral crisis, we have social development crisis because poverty is rising and we have to watch the government." - GMANews.TV