RP sticks to 3.3% GDP target

Finance Secretary Jose Isidro Camacho said yesterday the government would maintain its target of 3.3-percent annual gross domestic product (GDP) growth this year despite a lower forecast by the Asian Development Bank (ADB).

Reacting to a report that Camacho opposes the ADB downscaled its growth projections for the country at only 2.7 percent, Camacho said government‘s target of 3.3-percent GDP growth is still possible.

"I don’t agree with the ADB’s report. Based on what we have, the domestic economy is still doing well despite the circumstances," Camacho said.

Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura, for his part, said in a separate interview that strong performances of certain sectors of the economy will allow government to realize its growth targets for this year.

"What is important is that we don‘t go into recession," unlike some of the country‘s Asian neighbors, added Buenaventura.

Camacho and Buenaventura said in previous interviews that the economy is relying heavily these days on strong private consumption and the agriculture sector to spur growth despite the sluggish economy and the anticipated further deterioration after the country‘s major trading partner, the US, on which more than half of the country‘s export go, was hit by terrorist attacks and is also experiencing a recession.

Data show that private consumption and a strong local economy fueled by agriculture, construction and the services sectors, resulted in the 3.3 percent growth in the first semester. This was achieved Despite the contraction of exports by more than 10 percent.

Moreover, the growth was achieved with an inflation rate that is still well within the six to seven percent target range.

The ADB lowered its GDP forecast for the Philippine to 2.7 percent from an earlier target of 3.1 percent.

The ADB updated its forecast in the wake of the weakening global economy following the economic fallout from the Sept. 11 attacks on the US.

Camacho said the economy will definitely pick up by next year, depending on the rebound of the export sector.