After growing 4.1 percent over the first nine months, gross domestic product (GDP) for the fourth quarter should rise by 4.6 percent from the previous year, Neri said.
"The economy is on track to meet our full year target of four to 4.5 percent," he added.
The National Economic and Development Authority (NEDA) made this projection as Neri admitted that the so-called "747 Plan" was only a catchphrase, with no implications on the Medium Term Development Plan.
Speaking in yesterday’s yearend economic briefing, Neri said the ‘747 Plan’ being brandished by Congress was merely a "repackaging of the development plan," adding that all the components of the original program will be retained.
Under the plan, Neri said the Arroyo administration hoped to achieve a seven percent GDP growth within two to three years, beginning with a six percent growth in 2003.
Neri said the 747 Plan was an offshoot of earlier studies indicating that in order to eradicate poverty, the economy needed to post a continuous seven percent growth for at least seven years.
"If we don’t do seven percent GDP growth in two to three years, then I will admit failure," Neri said, adding that these growth rates were possible even without pump-priming.
"When we made the presentation, it had all the econometric models in it but it was the 747 catchphrase that caught on. It was intended for people with no patience for numbers," he explained.
According to Neri, the plan would not have an impact on the country’s already dismal fiscal deficit, saying that it would only take several key policy reforms to jump-start the economy.
"We will try doing it without pump-priming," Neri said. "There are policy changes that we can implement such as airline liberalization, port liberalization and railway development."
Neri admitted however that the Arroyo administration would be going against "entrenched interests" especially in airline and port industries which he said would have to be "de-monopolized".
Neri said the reforms would begin with the partial liberalization of the airline industry and the declaration of the Clark Air Base as an open-skies airport to transform it into a regional airline hub.
Shipping, on the other hand, would also have to be liberalized by allowing the establishment of roll-on-roll off ports in key cities in order to bring down shipping costs and unclog supply bottlenecks in the regions.
Neri also said NEDA was reviewing old projects that could be funded out of official development assistance, including the controversial P200 billion Mindanao Railway project which had been mothballed since 1998 when its proponents disappeared and could not be located by the Board of Investments.
Neri said he had ordered NEDA economists to review all foreign assisted projects (FAP) with the intention of streamlining them and "accelerating their implementation to mimic pump-priming."
In the fourth quarter, Neri said early indicators pointed to a 4.6 percent growth, taking off from the 4.9 percent growth in agriculture, 4.3 percent growth in industry and 4.8 percent growth in services.
Neri said the agriculture sector, in particular, posted a better-than-expected growth due to the bumper harvest in major crops in the last quarter instead of the usual main harvest during the third quarter.
Neri said the Arroyo administration’s target in 2003 was six percent GDP growth and on to seven percent the following year. "We can do it without hurting our fiscal balance if we can hasten the implementation of ODA projects," he said.
"We will begin these policy reforms now and by 2005 we should be reaping the results," he said.