NEDA chief admits need to review growth target

CEBU, Philippines – The chief state economic planner has admitted there is a need to review the Philippine growth target this year, noting the predicted stronger El Niño episode poses some risk on the country's growth.

Socioeconomic Planning Secretary Arsenio Balisacan said the ongoing El Niño phenomenon, seen to be the worst since the 1997-1998 event, is a downside risk to the nation's economic output.

President Benigno Aquino III had already ordered his cabinet to have a detailed road map for addressing the ill effects of El Niño, predicted to last toward the year's end through the first quarter next year.

Balisacan said the Development Budget Coordination Committee (DBCC) will meet soon to consider revising the government's full-year gross domestic product (GDP) growth target which is 7-8%. DBCC is a cabinet cluster tasked on setting the country's growth assumptions based on various macroeconomic indicators.

Balisacan, who is director general of the National Economic and Development Authority (Neda), said the first-semester economic expansion of 5.3% suggests that the "7-8% is rather too high given the changes in the global and domestic economy".

"The 7-8% would now appear to be unrealistic," Balisacan said in a media briefing in Cebu City last Sunday.

The Neda official said it's likely the target will be brought down to 6-6.5% which, he added, is quite realistic.

"If we can achieve 6-6.5% for the full-year," the Neda chief said, "that will still put the country as one of the fastest emerging economies in the world."

Despite the GDP growth slowdown in the first half of the year, Balisacan expressed confidence the Philippines is still a "stellar performer" in the global economy.

The Philippines' 5.6% economic expansion last quarter is currently the third highest in Asia, next to China and Vietnam.

The second quarter's growth was a rise from the downward-revised 5% in the first but failed to bring the 2015 first half figure anywhere close to the full-year target.

Economic managers, however, see the pace of expansion to pick up in the coming months with expectations that improved state spending will continue.

GDP measures the amount of final goods and services produced in a nation.