|
By Chino S. Leyco, Reporter
PHILIPPINE economic managers are set to cut the
country’s economic growth target this year due to skyrocketing
commodity prices, government sources said.
Officials said the Development and Budget
Coordinating Committee (DBCC) will revise the country’s gross
domestic product (GDP) growth goal this year to between 6 percent
and 6.7 percent from the original 6.3 percent to 7 percent target
range.
The figures were set by the DBCC for approval
Friday. The interagency body, which sets the country’s
macroeconomic goals and assumptions, is composed of the heads of the
finance and budget departments, of the National Economic and
Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP).
Aside from the country’s growth goal, the DBCC
will likewise revise its inflation assumption to a range of 4
percent to 5 percent from the original target of 3 percent to 4
percent.
“If oil and rice goods are up, consumer
spending will be affected,” an official said.
BSP Deputy Governor Diwa Guinigundo said the
DBCC will meet this month to discuss the revisions in the
country’s macroeconomic projections, adding the GDP growth target
will be subject to “downward revision.”
“The downward revision is due to the fact that
the global slowdown [is] expected in the various regions across the
world,” Guinigundo said.
He said commodity prices were the key to a
revision, but added that the outcome is not as predictable.
As the DBCC realigns its inflation range, the
91-day Treasury bill rate is seen to average 3.5 percent.
Economic managers also would expect Dubai crude,
the Philippines’ benchmark for the commodity, to cost $88 a barrel
this year from the original assumption of $62.
The interagency body had assumed the peso to
average between 40 and 43 to the dollar this year, as imports and
exports would grow 8 percent and 9 percent, respectively.
The Bureaus of Customs and of Internal Revenue (BIR)
collection targets, however, would remain despite the adjustments in
macroeconomic assumptions.
Both agencies had blamed low collections last
year on the rapid appreciation of the peso against the dollar.
The DBCC said that for every P1 appreciation,
the country enjoys P2.2 billion in savings from interest payments on
its foreign debt.
The BSP also said a stronger peso helps dampen
inflationary pressures arising from increases in international
prices of oil, metals, and certain agriculture commodities.
Its estimates show that a P1 appreciation
results in a 0.04-percentage-point reduction in the average annual
inflation rate, as the stronger currency cuts the cost of imports.
Despite the benefits of lower debt servicing
costs, a strong peso however erodes the earnings of exporters and
overseas Filipino workers (OFW).
The peso appreciation of 18.8 percent against
the greenback made the local currency one of Asia’s best
performers last year.
|
