OPTIMISM OF THE PALACE ON IMF PROJECTION

        “I believe the International Monetary Fund ((IMF) will be surprised when our gross domestic product (GDP) growth exceeds their targets. We’re looking at five to six percent growth. In any case, what’s equally important as the growth is the fact that it is being felt by a greater portion of the population,” said Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang, who expressed optimism that it would be able to prove the IMF is wrong in its projection that the Philippines would be the dawdler in economic growth among the ASEAN nations this year and in 2013.

          Secretary Carandang cited the government accelerated infrastructure spending, tourism development and higher agricultural production as factors that would lead to the country’s growth.

          In its latest World Economic Outlook (WEO), the IMF said the country’s GDP would grow 4.2 percent this year and 4.7 percent in 2013 after slackening to 3.7 percent last year from 7.6 percent in 2010 due to weak global trade and cautious spending by the Aquino government.

          The projected GDP growth this year for the Philippines  is slower than Indonesia’s 6.1 percent, Vietnam’s 5.6 percent, Thailand’s 5.5 percent and Malaysia’s 4.4 percent.

          But the government has been reporting some good news on the economic front. Growth of Philippine exports in February was reported at 14.6 percent, the highest growth since April 2010 driven by a rebound in electronics shipments, boosting hopes for stronger economic growth this year. The amount of foreign direct investments (FDI) in January 2012 also reached $766 million. In the previous year, the total FDI inflow was only $214 million for the same period.

          The Asian Development Bank (ADB) in their Asian Development Outlook for2012, said “forecasts for 2012 and 2013 assume that the government will raise spending, follow through on its commitment to improve the business environment and carry out some of the planned public-private partnerships, which include airports, highways and water supply operations.”

          The IMF sees the GDP in Asean-5 expanding by 5.4 percent this year and 6.2 percent next year from 4.5 percent last year. The multilateral lender sees the GDP in Asia growing six percent this year and 6.5 percent next year from 5.9 percent last year after activity across the region slowed during the last quarter of 2011, reflecting both external and domestic developments.

          In emerging Asia, adverse market developments were correlated with countries reliance on euro area banks, which have already begun reducing their cross-border lending.

          Asian banks are generally in good financial health and many large Asian banks have sufficient capacity to step up lending further.# ART