PHL faces tough challenge to meet 2011 GDP target

It would be difficult for the Philippines to meet its full-year economic target after the gross domestic product grew slower at 4.9 percent in the first three months of the year, the Bangko Sentral ng Pilipinas (BSP) said Monday. "Meeting the full year target will be challenging with this first quarter result," BSP Governor Amando Tetangco Jr. said in a text message to reporters. “There were unexpected developments that were not known when the full-year target was set," Tetangco said. The GDP grew 7.3 percent in the first quarter of 2010, according to the National Economic and Development Authority. Government has set a growth target of 7 percent to 8 percent this year, the numbers were hammered out before the full impact of the political tensions in the Middle East and North African and the disasters that hit Japan were assessed by Philippine economic managers, the central bank chief said. Still, BSP Deputy Governor Diwa Guinigundo said the first quarter results showed the resiliency of the country's macroeconomic fundamentals. "As expected, on account mainly of external factors, the GDP slowed down from the highs recorded last year. But such an output performance of nearly 5 percent speaks of [a] resilient economy, one that continues to grow and create jobs," Guinigundo added. The impact of the external developments on the domestic economy would only be temporary, according to the deputy governor. "The economy has sufficient strength to go through macro adjustment. We also believe that what pulled down economic performance is transitory," he added. Both Tetangco and Guinigundo pointed out that the current monetary policy stance of the central bank would still be enough to support strong economic growth. "Monetary policy continues to be appropriately balanced supportive of non-inflationary growth," Tetangco said "From a monetary perspective, we believe inflation remains the major concern and continued vigilance of monetary policy is more than warranted," Guinigundo said. — VS, GMA News