From Teetering to Regaining

Left and right we hear money managers say that the economy is set for a rebound after almost experiencing a national recession.  Although many - if not all, industrialized countries and emerging economies suffered recession, we were luckily spared.  As I was reading the business section of the Philippine Star yesterday, I saw an article which caught my attention.  Another green flag on the economy.  

Looking back, this was not the case about a month ago.  In a statement, Romulo Virola - senior official of the economic planning ministry said this “The Philippine economy is now teetering into recession.”  To which then Economic Planning Adviser and NEDA Chair Ralph Recto disagreed to.

I quickly checked the net and I found a very similar report, here it goes: (dear writer, pardon me for highlighting some words in the article)

Growth forecasts for RP to be raised

abs-cbnNEWS.com | 08/28/2009 4:55 PM

MANILA - Investment banks and private think tanks are set to revise upward their growth forecasts for the Philippines this year following the modest growth posted by the domestic economy in the second quarter.

New York-based Global Source and investment bank Development Bank of Singapore (DBS) said they may upgrade their full-year gross domestic product (GDP) projections for the country after it registered a growth of 1.5% last quarter, avoiding recession.

“The once teetering economy now seems to be regaining balance with private consumption starting to normalize and the state spending program providing a needed boost,” Global Source said in a market brief.

On Thursday, the government reported that its P330-billion economic resiliency plan largely fueled the rebound in the economy from a measly 0.6% revised growth in the first three months.  It placed first-half growth at 1.0%.

“This development keeps us on track in terms of our own forecast for the year (2009), which we place at about 0.5%-1.0% with the odds now seemingly tilted to the higher end,” said Global Source.

The think tank pointed out that the growth experienced in the second quarter would prompt the central bank to pause from its easing cycle that has effectively boosted the weakening economy.

“For the meantime, we see this bit of positive news as an indicator that monetary authorities will likely keep policy rates at their current levels,” it said.

The central bank’s Monetary Board has slashed its key policy rates six times since it started its easing cycle in December last year to cushion the impact of the US financial crisis.

In all, the board slashed its rates by 200 basis points, bringing the overnight borrowing rate to a record low of 4.0% and the overnight lending rate to 6.0%.

For 2010, Global Source said it is sticking to its 3.3% GDP forecast for the Philippines.

“With expected lackluster global economic recovery, especially in the US, and slower growth in public spending as indicated by the proposed 2010 budget (despite upcoming elections), we do not see any sharp upturn in economic pace in the near term,” it explained.

Meanwhile, DBS said it would raise its GDP forecasts for the Philippines this year and next year.

“Naturally, the arithmetic of this means that our full-year growth forecast of 0.5%, and perhaps even 4.6% for 2010, will see upgrades in the coming days,” DBS said in its daily note.

The Singapore-based investment bank said it expects moderate GDP growth starting the second half of the year up to next year.

The National Economic and Development Authority is confident that the Philippines would be able to exceed the revised GDP growth forecast of 0.8 to 1.8% set by the Development Budget Coordination Committee for this year.

Although it is just slightly higher than the first intended forecast, an increase in small margin is still an increase.  After all, businessmen and finance managers from here and abroad still take it as a sweet sign of recovery, and a nearing bull-market (hopefully).  Let’s not forget that some departments and government offices receives a measly percentage of the national budget, also a representation of the GDP, which then is passed on for social development and projects. 

Source:

www.abs-cbnNEWS.com

Reports from the Philippine Star & AFP

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Ninoy: “The Filipino is worth dying for..”

Cory: “The Filipino is worth living for..”

GMA & most admin officials: The Filipino is worth dining for..(I hope not) 

*Photo 1 - www.jampix.blogspot.com  

  Photo 2 - www.lefteyeonthemedia.wordpress.com

 thanks!