Economic growth in H2 seen within gov’t target

The National Economic and Development Authority (Neda) is confident that economic growth in the second semester will be within the government’s 5- to 6-percent target.

This was despite the decline in the composite leading economic indicators (LEI) for the third and fourth quarters, forecasting a possible economic weakening in the second semester.

“I think there is a very strong, high probability,” said Economic Planning Secretary Arsenio Balisacan, when asked if economic growth in the second semester will still fall within the government’s full year target.

Economic growth, as measured by gross domestic product (GDP), hit 6.1 percent in the first semester.

“Exports are not that bad, remittances are robust, inflation is very low, interest rates are very low,” Balisacan said.

The latest official data showed that outbound shipments in August reached $3.798 billion, declining by 9 percent from the level in the same month last year. Aggregate exports in the first eight months of the year, however, rose by 5.4 percent to $35.283 billion from a year ago.

Remittances from overseas Filipinos coursed through banks reached $1.8 billion in August, increasing by 7.6 percent from $1.67 billion last year.

In the meantime, inflation eased in September to 3.6 percent, bringing the average from January to September to 3.2 percent, or the low end of the official 3- to 5-percent projection for the year.

The Bangko Sentral ng Pilipinas’ overnight borrowing and lending rates now stand at 3.5 and 5.5 percent, respectively, after a 25-basis-point reduction last week.

Balisacan noted that there were some instances when the LEI was wrong, citing the case in 2010 when it was negative for four quarters but the country’s economy expanded by 7.6 percent.

The National Statistical Coordination Board had reported that the LEI, a mix of indicators used to forecast economic activity, came at 0.016 in the fourth quarter from the revised 0.131 in the third quarter.

The figure was 0.193 and 0.202 for the first quarter and second quarter, respectively.