DEUTSCHE BANK ECONOMIST SEES 5% RP GROWTH
MANILA, AUGUST 18, 2006 (STAR) By Ted P. Torres - The country’s gross domestic product (GDP) is forecast to expand by five percent this year as well as in 2007 despite an anticipated slowdown in the global economies, according to an official of an international bank.
Deutsche Bank chief economist Dr. Norbert Walter said the key to the Philippines’ modest economic growth is domestic economic policies and political stability.
"There will be minimal suffering for the Philipine economy in the face of major risks to the global economy," Walter said. "The potential for vulnerability will be the domestic political front."
He said the National Government must implement and complete all its infrastructure projects immediately, and keep its governmental infrastructure "lean and mean."
The Deutsche Bank economist said, however that the manufacturing sector will continue to regress being one of the first sectors to directly suffer from the global economic softening.
As expected, the overseas Filipino workers (OFWs) remittances will continue to fuel the country’s economic growth, increasing by almost 20 percent annually.
Remittances coursed through the banking or formal sector reached $10.6 billion in 2005, and it is expected to expand further to over $12.8 billion this year.
Remittances sent through the so-called informal sector, including legitimate money transfer companies, is forecast to be worth $6 billion to $8 billion this year.
OFW money fuels consumption, increases investments into the local economies, revive the property sector, as well as prop up the country’s foreign currency reserves.
"Remittances will be the stabilizing factor for the Philippine economy," he added.
His unsolicited advice for the country is to carefully study its successful neighbors and not compete head on.
"The Philippines must exploit its close relationship with the United States, enhance its logistical camp, strengthen the tourism industry, go all out for fuel and energy efficiency as well as alternative fuels," Walter added.
The country’s economic ma-nagers forecast GDP growth for this year at 5.3 to 6.3 percent. The Asian Development Bank (ADB) placed it at five percent while the World Bank optimistically placed it at 5.2 percent.
Chief News Editor: Sol Jose Vanzi
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