RP wared over economy

RP wared over economy

MANILA (AFP): The International Monetary Fund (IMF) has warned the Philippines of emerging imbalances that threaten to derail its fledgling economic recovery, a confidential document published here Saturday showed.

The document obtained by the Manila Chronicle newspaper hailed the 5.07 percent growth in the first semester, but urged that the ballooning trade gap, nearly double-digit inflation and negative real interest rate be addressed.

Philippine officials were not immediately available for comment, but the frank assessment shows that tough times lie ahead for Manila as it strives to catch up with its more prosperous Southeast Asian neighbors.

"Despite the early stage of the current economic recovery, there are several signs which suggest that such imbalances may already be emerging," an IMF review team that recently visited Manila said in the memorandum to Philippine officials published by the daily.

The panel noted that the trade balance had "deteriorated sharply" to a US$4 billion deficit in the six months to June -- equivalent to 13.5 percent of gross national product (GNP).

While export performance considerably grew at 17 percent, imports expanded 26 percent year on year, it added.