MANILA, Philippines - The Congressional Planning and Budget Department (CPBD), the think-tank of the House of Representatives has revised upward its economic growth forecast for 2009 on the back of the higher-than-expected growth in the second quarter.
In a recent report to members of the House, CPBD Director-General Rodolfo Vicerra said the economy may grow anywhere from 1.1 percent to 1.9 percent this year, an upward revision from its projection of 0.6 percent to 1.8 percent last May.
CPBD upgraded its 2009 economic growth projection following the 1.5-percent growth in the second quarter of the year which beat the government’s forecast range of -0.1 percent to 0.9 percent for the period.
Its full-year economic growth projection is a bit more optimistic than the official forecast range of 0.8 percent to 1.8 percent adopted by the Development Budget Coordination Committee in June 2009.
However, despite the upgrade, the latest CPBD projection is still below its original forecast range of 3.2 percent to 4.1 percent for 2009.
Nonetheless, the congressional research arm said “incremental improvement” in three major sectors would support growth for the rest of the year.
It noted that the services sector, for one, is expected to continue its growth and attain a full-year expansion of 2.4 percent to three percent.
The industry sector, the CPBD said, may perform anywhere from -1.1 percent to 0.2 percent in 2009 because of the continued weakness of the manufacturing sector.
“The apparent recovery of the construction (due mainly to public construction) and mining and quarrying subsectors would be insufficient to mitigate the impact of the continuing slowdown in manufacturing,” CPBD said.
Furthermore, the think-tank said the agriculture, fishery and forestry sector is also expected to post lower-than-expected growth this year, ranging from 1.6 percent to 2.2 percent because of the expected adverse impact of an emerging El Niño situation.
On the other hand, CPBD expects private and public consumption to strengthen for the remainder of the year, mainly due to hefty dollar remittances from overseas Filipinos and the continued implementation of the government’s Economic Resiliency Plan.
However, the think-tank noted that there is a need for the government to continue pushing public capital expenditures.
Finance officials have admitted that government agencies are still having a difficult time disbursing funds for infrastructure projects allocated to them by the Department of Budget and Management.
In the first quarter of the year, the economy grew by only 0.4 percent compared to the same period in 2008.