The Philippine government's growth target this year of 7 to 8 percent may be more difficult to achieve after the disaster in Japan and with the turmoil in the Middle East, a presidential spokesperson said. "When we came up with the 7 to 8 percent economic growth target, we were not expecting the political violence in the Middle East and the earthquake and tsunami in Japan," Ricky Carandang said on Sunday.
"I would have to admit it would be more challenging to attain the target given these developments," he said. On Wednesday, economic planning Secretary Cayetano Paderanga said the government may lower this year's growth target range of 7 to 8 percent, above estimates of 5 percent growth by most analysts as well as the World Bank and Asian Development Bank.
The central bank has said it was also reviewing the remittance growth forecast of 8 percent this year. Remittances from around 10 million Filipinos overseas - about one-tenth of the population - are a key support of the peso and a driver of consumption in the Southeast Asian economy, which posted 7.3 percent growth in 2010, its fastest in more than three decades.
Officials have said they need more time to assess the impact of a potential slowdown in trade and development loans from disaster-stricken Japan, the Philippines' major trading partner, and reduced remittances from Filipinos working in the Middle East and North Africa. Japan's disaster may be negative for the Philippine economy in the short-term, but the country should benefit from its Asian neighbour's massive reconstruction drive, central bank officials said last week.
"Over time, as the efforts to reconstruct and rehabilitate the Japanese economy proceeds, higher demand will contribute to more resilient domestic economy and that will also have some favourable impact on the emerging markets, including the Philippines," central bank deputy governor Diwa Guinigundo said.