PNoy admin lowers 2011-2012 economic forecasts

The Aquino administration has lowered its growth and trade forecasts until next year and narrowed its deficit ceiling this year amid global uncertainties, a government official said Wednesday. The economy this year will likely grow between 4.5 to 5.5 percent in gross domestic product (GDP) terms, based on estimates presented by Socioeconomic Planning Secretary Cayetano Paderanga Jr. at a Senate budget hearing. The new numbers are significantly lower than the 5 to 6 percent assumed under the 2011 budget. Exports will likely grow by 5 percent this year from an earlier estimate of 9 to 10 percent, with imports expanding by 13 percent from an earlier estimate of 17 to 18 percent, Paderanga said. For 2012, government projections show the economy growing by 5 to 6 percent, lower than the previous assumption of 5.5 to 6.5 percent. Along with this year’s economic slow down, the Aquino administration sees the 2011 budget deficit narrowing further to P260.6 billion, or 2.6 percent of GDP, from roughly P300 billion or 3 percent of GDP. The P260-billion deficit target for 2011 takes into account lower revenues of P1.357 trillion and expenditures of P1.617 trillion, down from the previous estimates of P1.411 trillion and P1.711 trillion, respectively. Merely adjusting expectations Finance Secretary Cesar Purisima, however, said the government will keep its original targets. “We are not changing the targets," Purisima said in an interview with reporters after the hearing, adding that government merely adjusted its expectations to more realistic numbers. Government also took into account the developments in the global market, the Finance chief noted. The Aquino administration expects uncertainties in the United States and in Europe to weigh against the Philippine economy. Given the narrower-than-expected P260-billion budget gap for the year, it expects the Bureau of Customs to collect only P276.4 billion from its P320-billion target, and the Bureau of Internal Revenue to generate P935.5 billion as opposed to its P960-billion collection goal. — PE/VS, GMA News