|
By Maricel E. Burgonio, Reporter
THE Bangko Sentral ng Pilipinas (BSP) said the
country’s economic growth is likely to fall within the
government’s forecast despite high oil and food prices.
BSP Deputy Gov. Diwa Guinigundo said the
government has no need for cutting its forecast. The Development and
Budget Coordinating Committee is set to review its macroeconomic
targets to assess the impact of higher inflation due to costlier
fuel and food.
The interagency DBCC earlier forecast that the
economy, as measured by the country’s gross domestic product
(GDP), would expand by 6.3 percent to 7 percent this year even with
more expensive fuel.
The International Monetary Fund already
downgraded its GDP forecast for the Philippines to 5.8 percent this
year from the original 6 percent, citing the likely impact of a US
slowdown. The lender however is not ruling out a higher 6.3 percent
expansion this year if the government further improves its fiscal
position through higher taxes for state infrastructure development.
Guinigundo said growth this year will be
supported by stable remittance inflows that would likely offset the
impact of costlier oil. Increasing demand for overseas Filipino
workers (OFW) bolster the peso vis-à-vis the dollar this year, he
said.
“OFW remittances will cushion that [impact of
oil price]. The exchange rate is quite better and the demand for
workers is inelastic,” Guinigundo told reporters. Inelastic demand
means that host-nations would still seek out OFWs even at higher
wage rates.
The Philippine Overseas Employment
Administration showed that the total number of deployed overseas
workers grew year-on-year by 12.4 percent to 108,579 in January.
Remittances coursed through banks rose by 15 percent to $1.3 billion
the same month, and are estimated to reach $15.7 billion for the
whole year.
Guinigundo said rice production likewise would
rise due to high demand, as the commodity accounted for 9.36 percent
of the total basket used for computing price increases.
The current high demand of rice would drive
farmers to increase output, he said.
“I’m expecting over time that the will
increase,” the BSP official said.
“We are the most productive rice producers in
the world. But because our population is growing so much and the
land that is being planted with rice is getting smaller—that’s
why we have this problem. That’s the problem of supply. This
problem was aggravated by the problem of production and oil
prices,” he added.
The BSP however admitted earlier that inflation
would surpass its target of 3 percent to 5 percent this year due to
price pressures coming from oil and food. Prices of goods and
services last month rose to 6.4 percent.
International oil prices shot past $100 per
barrel, while rice prices have increased by about 20 percent in the
past three months and more than doubled since 2004, the United
Nation’s Food and Agriculture Organization said recently.
|
