Philippines gets IMF growth forecast upgrade
11/25/2009 | 05:25 PM
(Updated) The International Monetary Fund (IMF) has upgraded its Philippine growth forecast for this year, expecting that private consumption – boosted by increased remittances – will help domestic demand.
The Philippines’ gross domestic product (GDP) – the sum of the country’s goods and services – would likely expand by 1.5 percent this year, Il Houng Lee, head of the visiting IMF team, said in a press conference on Wednesday.
Last October, the Washington, D.C.-headquartered agency predicted a one percent expansion for the country this year.
The multilateral body’s latest outlook falls within the government’s economic managers expectations of a 0.8 percent to 1.8 percent growth this year.
Moreover, the IMF sees overseas Filipino workers (OFWs) remittances to grow by four percent this year and six percent next year.
Once received by beneficiaries at home, remittances are used to buy cellphones and cellphone credits – popularly known as load – cars, houses, among others, driving local demand for goods and services.
“The economic recovery in the Philippines is also gaining momentum," Lee said, saying that the economy has rebounded.
In the second quarter, the Philippines’ GDP reached 1.5 percent after growing by only 0.6 percent in the previous quarter.
Despite these optimistic projections, the IMF expressed concerns about the Philippines seeming inability to control spending and collect more taxes.
From January to October, the government spent $266.1 billion more than it earned, breaching its full-year deficit cap of P250 billion, or 3.2 percent of GDP.
This figure has gone beyond previous deficits incurred by the Arroyo government. In 2002, the deficit reached 5.3 percent of GDP, or P210.7 billion.
For 2010, the government expects to post a shortfall of P234 billion or 2.8 percent of GDP, which is targeted to grow anywhere from 2.6 to 3.6 percent.
“The mission recommends containing the deficit at about 3.5 percent of GDP by maintaining civil service wage costs and public investments at projected 2009 levels and by introducing new legislative and administrative measures," he added.
He also emphasized that no new revenue eroding measures should be approved after the Philippines’ overall tax effort fell sharply. - RJAB, Jr., GMANews.TV
The Philippines’ gross domestic product (GDP) – the sum of the country’s goods and services – would likely expand by 1.5 percent this year, Il Houng Lee, head of the visiting IMF team, said in a press conference on Wednesday.
Last October, the Washington, D.C.-headquartered agency predicted a one percent expansion for the country this year.
The multilateral body’s latest outlook falls within the government’s economic managers expectations of a 0.8 percent to 1.8 percent growth this year.
Moreover, the IMF sees overseas Filipino workers (OFWs) remittances to grow by four percent this year and six percent next year.
Once received by beneficiaries at home, remittances are used to buy cellphones and cellphone credits – popularly known as load – cars, houses, among others, driving local demand for goods and services.
“The economic recovery in the Philippines is also gaining momentum," Lee said, saying that the economy has rebounded.
In the second quarter, the Philippines’ GDP reached 1.5 percent after growing by only 0.6 percent in the previous quarter.
Despite these optimistic projections, the IMF expressed concerns about the Philippines seeming inability to control spending and collect more taxes.
From January to October, the government spent $266.1 billion more than it earned, breaching its full-year deficit cap of P250 billion, or 3.2 percent of GDP.
This figure has gone beyond previous deficits incurred by the Arroyo government. In 2002, the deficit reached 5.3 percent of GDP, or P210.7 billion.
For 2010, the government expects to post a shortfall of P234 billion or 2.8 percent of GDP, which is targeted to grow anywhere from 2.6 to 3.6 percent.
“The mission recommends containing the deficit at about 3.5 percent of GDP by maintaining civil service wage costs and public investments at projected 2009 levels and by introducing new legislative and administrative measures," he added.
He also emphasized that no new revenue eroding measures should be approved after the Philippines’ overall tax effort fell sharply. - RJAB, Jr., GMANews.TV
