Economic Prospects

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• Economic Prospects
• for 2004-2005

Secretary Romulo L. Neri National Economic and
Development Authority
17 January 2005
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Outlook for 2004(Growth rates, in percent)
as of 17 January 2005
Sources NSCB and NEDA
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Growth Indicator MISSI Value of Production
Sales (Growth rate, in percent)
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Growth Indicator Exports(Growth rate, in
percent)
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Growth Indicator Imports(Growth rate, in
percent)
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Growth Indicator OFW Remittances (Growth rate,
in percent)
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Growth Indicator Volume of Tourist Arrivals
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Growth Indicator FDI
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Growth Indicator Building Permits(Growth rate,
in percent)
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Fiscal Performance, Emerging FY 2004In billion
Pesos
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Prospects for 2005
Growth rates, in percent
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2005 Growth Drivers

• Agriculture
• Impact of El Nino will be mild due to government
  interventions in irrigation and cloud seeding
• Support services to increase production/productivi
  ty distribution of HYV and certified seeds,
  fingerlings, and bio-agents to control
  infestation fertilizer subsidy program (Tipid
  Abono) rehabilitation of post-harvest
  facilities credit support from Agro-industry
  Modernization Credit and Financing Program
  (AMCFP) and GFIs

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2005 Growth Assumptions

• Agriculture
• Palay is projected to grow 3.9 percent in 2005
  given DAs production target of 15.2 million MT
• Corn is projected to grow 9.6 percent given DAs
  corn production target set at 5.9 million MT
• DA and LGUs to jointly fund the subsidy program
  for hybrid corn and rice

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2005 Growth Assumptions

• Industry
• Industry will be supported by strong growth in
  construction sector with the following major
  projects in 2005
• Northrail
• Subic Clark Tarlac Road
• South Luzon Expressway
• Subic Port
• Airports of Iloilo, Bacolod, and Cagayan de Oro

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2005 Growth Assumptions

• Industry
• Exports of services from business processing
  outsourcing activities will continue to grow at
  close to 15 percent in 2005
• DTI is expecting the country to have 80,000 call
  center agents (or 40,000 seats) in 2005 from
  35,000 seats in 2004

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2005 Growth Assumptions

• Industry
• The SC ruling on the constitutionality of the
  Mining Act is expected to revive the mining
  sector resumption of operations will boost the
  mining sector, while mining explorations will
  support the construction and business services
  sectors

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2005 Growth Assumptions

• Industry
• Mining production will be boosted by expansion in
  operations of PASAR and resumption of operations
  in Compostela Valley (Sabina Mines and Apex
  Mining)
• DTI reported that Chinese firms are now in talks
  with some Philippine companies to revive
  Philnico/Nonoc in Surigao del Norte
• DTI will lead a mission to China to take
  advantage of Chinese firms interest in the
  mining industry

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Inflation Prospects

• Inflation is expected to decelerate in 2005 with
  December 2005 inflation down to 5 percent from
  8.6 percent in December 2004
• Dubai oil prices are expected to remain stable in
  2005 with world demand and world supply in
  balance (NEDA forecast assumes 34/barrel Dubai
  oil price and exchange rate moving in the range
  of P55-57/ or an average of P 56/)

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Thank You
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Asian GDP(Q1-Q3 growth rate in )