Government sees sustained growth

Despite inherent risks and the continued slowdown in the economies of its major trading partners, the government expressed confidence yesterday that economic growth, which was better-than-expected in the first semester, can be sustained for the rest of the year.

In a mid-year economic briefing held yesterday by the Arroyo administration’s economic team led by Economic Planning Secretary Dante Canlas, Finance Secretary Jose Isidro Camacho, Bangko Sentral ng Pilipinas Governor Rafael B. Buenaventura, Budget and Management Secretary Emilia Boncodin, and Trade and Industry Secretary Manuel Roxas II, government stuck to this year’s gross domestic product (GDP) growth targets of 3.3 percent to 3.8 percent and 3.8 percent to 4.3 percent for gross national product (GNP).

Over the next three years, according to the first economic blueprint of the Arroyo government, the economy should grow at an average of around five percent.

Growth under the ambitious "Philippine Economic Plan for Growth and Equity" will be powered by the key services, industrial and agricultural sectors.

The plan is the core of a medium-term Philippine development plan for the 2001-2004 period which was being finalized at present, Canlas said.

He said that the Philippine Economic Plan was built on the progress made in the six months since President Arroyo assumed power in January, during which the economy grew at an annual rate of 3.3. percent.

The blueprint is centered on financial discipline, good governance, market-oriented reforms and poverty eradication.

"Underpinning the plan’s framework is a recognition that a stable macroeconomic environment must be created in order to stimulate investment and sustain growth," Canlas said.

He said the government would deliver a well-coordinated set of fiscal and monetary policies that support a sound fiscal and debt position, low rates of inflation and a healthy external balance.

The plan envisages annual average gross domestic product (GDP) growth of 4.7 percent to 5.2 percent for the 2001-2004 period from 3.6 percent during the 1993 to 2000 period.

The plan calls for an inflation rate at five to six percent over the planning period and aims to reduce the fiscal deficit from P145 billion in 2001 and achieve a balanced budget by 2006 largely through tax reforms.