IMF sees RP growth at 3%

IMF sees RP growth at 3%

WASHINGTON, July 9 (AFP) - The IMF on Monday forecast economic
growth in the Philippines this year of three percent -- slightly
better than some recent international forecasts, but below last
year's pace of 3.9 percent.

The International Monetary Fund, in a statement following
consultations with Manila, said it sees "a modest pickup in
domestic demand" as a result of improved consumer confidence.

But it also said the Philippine economy is subject to risks of
a global slowdown, which could hurt the country's electronics
exports, and higher interest rates from the country's budget
deficit.

The IMF figures are slightly different from those of the
government, which said it posted four percent gross domestic
product growth last year, and is projecting expansion of 3.3
percent to 3.8 percent for 2001.

But multilateral lending agencies were recently forecasting
the economy will grow 2.6 percent this year, or barely above the
national birth rate of 2.36 percent.

The IMF said President Gloria Arroyo "inherited a challenging
economic situation, with heightened vulnerabilities in the
fiscal, banking and external sectors."

The IMF said inflation should moderate from about 6.7 percent
in April to five percent by the end of the year, which should
allow the central bank to cut interest rates.