MANILA, JULY 9, 2007
(STAR) By Iris Cecilia C. Gonzales - The government has revised upward its gross domestic product (GDP) growth projection for 2008 due to an expected acceleration in agricultural production, a hike in tourism and a surge in investments.

The executive technical board of the Development Budget Coordination Committee (DBCC) raised the GDP growth projection for next year to 6.1 to 6.8 percent, higher than the previous forecast of 5.8 to 6.6 percent, DBCC sources revealed over the weekend.

The board made the revisions in a meeting last month but sources said these have yet to be approved at the Cabinet level.

The latest GDP revision, however, is only slightly higher than the projected GDP growth for this year of 6.1 to 6.7 percent.

In the first quarter of 2007, the economy, as measured by the GDP, expanded by 6.9 percent but the government believes the economy may not be able to post the same growth rate for the rest of the year.

Aside from its GDP projection, the DBCC, which sets the country’s economic growth targets and projections, also revised its assumptions for the peso-dollar exchange rate, the 91-day Treasury bill as well as export and import growth rates.

For the foreign exchange rate, the DBCC expects the peso to further strengthen to P47 to P49 against the dollar next year from a previous assumption of P48 to P50 against the greenback.

The DBCC based its new peso-dollar exchange rate assumption on stronger inflows from overseas Filipino workers, an improvement in foreign direct investments, and the liberalized policy of the Bangko Sentral ng Pilipinas on the entry of dollars into the country.

Merchandise exports, meanwhile, are projected to grow by 12 percent next year to $57.3 billion from an expected $51.2 billion this year. Imports are expected to grow by 12 percent to $65.4 billion from an expected $58.4 billion this year.

As for oil prices, the DBCC expects volatility in the global market to continue given a tightness in supply from Middle Eastern countries.

The DBCC has revised its Dubai oil price projection to $62 to $70 per barrel from a previous assumption of $57 to $62 per barrel.

The increase in projection takes into account capacity constraints in the Middle East, the negligible impact of renewable energy and biofuels and the rising trend of geopolitical tensions in Iraq and Nigeria, the DBCC sources explained.

Chief News Editor: Sol Jose Vanzi

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