Government to upgrade GDP growth target for this year

MANILA, Philippines - The government will likely revise upward its gross domestic product (GDP) growth target for 2010 on the back of surging exports and strong investor confidence.

“An upward adjustment is more likely looking at the indicators,” National Economic and Development Authority (NEDA) officer-in-charge Rolando Tungpalan said yesterday.

However, the interagency Development Budget and Coordination Committee (DBCC) has yet to meet to decide if there would be an upward revision in the GDP growth target for the year of five percent to six percent.

 “The DBCC will decide based on some recommendations from the NEDA. We will defer to the DBCC,” Tungpalan said.

He nonetheless noted the strong performance of exports, indicating an improving economy.

Exports grew 36.6 percent to $4.7 billion in August from $3.473 billion a year ago, the National Statistics Office (NSO) reported earlier.

Aside from strong exports, Tungpalan also noted the strong investor confidence and strong dollar inflow from overseas Filipino workers.

 “There are other factors aside from exports such as OFW remittances,” Tungpalan said.

Dollar remittances in the first seven months of the year rose by 7.1 percent to $10.67 billion, up from $9.97 billion in the same period last year.

In July alone, remittances hit $1.61 billion or 8.2 percent above the $1.49 billion recorded in the same month last year.

Remittances have kept the Philippine economy afloat but beneficiaries of these hefty inflows are now saying that they are getting less because of the continued appreciation of the peso against the dollar.

In the second quarter of the year, GDP grew by 7.9 percent, up from a revised 7.8 percent performance in the first quarter of the year.

The Asian Development Bank (ADB) earlier upgraded its GDP growth forecast for the year to 6.2 percent from five percent previously on the back of a rebound in trade and investment and growth in private consumption.

Tungpalan welcomed the upward revision of the ADB, saying that this bodes well for the country.