Del Rosario said the MBC’s slightly lower GDP growth projection is based on a lower agriculture sector growth this year as a result of the calamities that adversely affected the sector in the fourth quarter of last year and the effect of the El Niño phenomenon this year.
The government’s plan to focus on increased infrastructure spending in 2007 is expected to help propel growth this year, he said.
However, the MBC’s conservative growth projection is not shared by the European Chamber of Commerce of the Philippines (ECCP).
According to Henry Schumacher of the ECCP, "we do not expect much to happen in the first half of the year except for the election."
Schumacher was also skeptical about the Arroyo administration’s plan to increase infrastructure spending.
"I doubt much (infrastructure) can be done in an election year," Schumacher said, noting that there is usually a ban on construction during the election period.
At best, Schumacher said "it would be difficult" and expressed doubt that the government would be able to improve its infrastructure in three to four years’ time.
"That’s a tall order," he said, noting that the Philippines needs to prove to potential investors that it would be able to maintain consistency in its economic policies and uphold the sanctity of contracts.
Del Rosario agreed that the government’s "flip-flopping" on policies such as in the mining sector "is a deterrent to attracting foreign direct investments."
The need for increased infrastructure spending was the topic of the MBC’s meeting yesterday with no less than World Bank country representative Joachim von Amsberg reiterating the need for the Philippine government to focus on increased infrastructure spending to attract more investors.