RP economy recovers

RP economy recovers

MANILA (AFP): The Philippine economy has shown strong signs of recovery but faces new threats from inflation and a growing trade gap, a report submitted to an Asian Development Bank (ADB) conference here yesterday said.

The report, by the semi-official Philippine Institute for Development Studies (PIDS) forecasts gross national product (GNP) growth of 5.3 percent and gross domestic product (GDP) growth of about five percent in 1994 with higher growth in 1995.

The report credited this to economic reforms such as liberalization of key sectors, adding that increased exports and foreign investment as well as more spending on infrastructure and improvements in revenue collection, had "raised the likelihood of sustained growth in the medium term."

However, the report also warned of "risks that could undermine the growth process," among them the ballooning trade deficit, forecast to hit US$8.2 billion in 1994.

It also cited still-high inflation, despite the appreciation of the Philippine peso since October. This could be a sign that the country's economic output is near the limits of its potential, it said.