The country is not likely to go into an economic recession next year even in the face of the global financial crisis, a stock market and financial analyst said yesterday.
“The projection is the economy will grow by four percent to five percent this year. Next year, growth will be around four percent. It will slow down, but we will not slip into a recession,” Astro del Castillo told the Serye Café’ news forum in Quezon City.
“This was also the sentiment expressed by most businessmen in a recent survey,” he said.
A recession is defined as negative growth for two consecutive quarters.
However, Del Castillo warned the people that they should brace themselves for harder times.
He said the financial crisis in the United States, Europe and other developed nations means that their people would not spend as much as they have before the crisis set in.
“For us, that will translate into fewer jobs abroad and fewer export products bought by foreign consumers. Thus, our export industries and the manufacturing sector will be adversely affected,” he said.
There will be fewer foreign tourists who will most likely not spend as much as they have in better times, he said.
He added that dollar remittances are expected to decline since a big number of overseas Filipino workers are in North America, he added.
Del Castillo pointed out that amid the gloom, there is one piece of good news that should soften the impact of the global financial crisis: falling oil prices.
“Lower oil prices should translate into lower consumer prices, including electricity rates and transport fares,” he stressed.
He said the government should see to it that the huge reduction in oil prices would benefit the public.
He noted that the price of crude oil in the world market has gone down from a high of $147 per barrel before the global financial crisis erupted to about $46 per barrel, or by more than $100.
Due to insistent prodding from concerned government officials, oil companies, particularly the Big 3, have been forced to roll back prices.
However, despite the recent rollback, Energy Secretary Angelo Reyes said oil firms should reduce prices further.
According to Economic Planning Secretary Ralph Recto, at a $50 crude price, gasoline and diesel should be selling at no more than P35 per liter.