Philippines maintains economic targets: Ramos

Philippines maintains economic targets: Ramos

MANILA (AFP): The Philippines is maintaining its economic growth target of seven percent this year despite the battering of the peso, President Fidel Ramos said Wednesday.

"I do not see, as of the moment, any need to revise our economic targets," Ramos said in a news conference.

"We're still looking at a budgetary surplus, a single-digit inflation, seven percent gross national product growth rate for 1997," he added.

The peso closed at 29.30 pesos to the greenback Wednesday, 1.03 percent lower from a day earlier, dealers said.

It was down 10.98 percent from the level of 26.40 pesos to the dollar prior to the government decision Friday to allow the currency to trade in a wider daily band.

The Philippines has targeted a seven-to-eight-percent GNP growth this year.

But analysts have cautioned growth could fall short of target because of an expected slowdown in the manufacturing sector resulting from higher interest rates.

Central Bank of the Philippines governor Gabriel Singson said Wednesday the bank raised the average inflation rate forecast for 1997 to 8.5 percent from 5.2 to 5.7 percent.

Finance Secretary Roberto de Ocampo said Wednesday that the peso crisis was "fleeting" and the situation was expected to stabilize within the next "10 days to two weeks," based on previous experience.

"This should not undermine our economic prospects, as much of the financial community in the world continues to see bright prospects for our tiger cub economy," De Ocampo said.

His office on Wednesday released data showing that the government posted a budget surplus of 4.5 billion pesos (US$155 million) in the six months to June.

The finance chief dismissed persistent comparisons with the Thai economic woes, saying that "in the long run," stable Philippine economic fundamentals will be a bulwark against foreign currency speculators threatening southeast Asian economies.

Overexposure by Thai banks in the overheated property sector was among the main reasons for the financial crisis there, which resulted in the floating of the baht.

But De Ocampo said loan exposure by Philippine commercial banks to the property sector was 10.9 percent as of end December 1996, compared to 13 percent for Thai banks and 30 percent for Thai financial companies.

He said that since the peso was effectively devalued on Friday, there had been "no wild swings" in the local currency against the U.S. dollar.