(Releads, adding comments from planning and budget secretaries)
By Neil Jerome Morales
MANILA, June 8 (Reuters) - The Philippines is at risk of missing its target for 7-8 percent economic growth this year, according to officials, but the central bank chief said there was no need to give extra monetary stimulus to one of the world’s most rapidly expanding economies.
Surprisingly weak econmic growth in the first quarter due largely to weak government spending, cast doubt on whether the 2015 target could be attained.
“The lower end is still within reach. The high end of 8 pct is difficult (to hit),” Economic Planning Secretary Arsenio Balisacan told Reuters at the sidelines of a congressional hearing on Monday.
Government officials have committed to correct the underspending in coming months. Measures have been taken to remove obstacles to procurement, improve the preparation of projects and clear the way for their implementation.
Budget Secretary Florencio Abad said the government will certainly do better in the second quarter but it is difficult to say to what extent.
“Eight percent is really on the high side considering the performance in the first quarter and the previous years, but that should not keep us from aspiring to go within the range we have already set, which is 7-8 percent,” Abad said.
The economy grew 0.3 percent in the first quarter from the previous quarter, its weakest pace since the depths of the global financial crisis in 2009, fueling speculation of monetary policy easing. Year-on-year growth slowed to 5.2 percent, the slowest in more than three years.
Bangko Sentral ng Pilipinas Governor Amando Tetangco said, however, that he saw no reason to ease monetary policy to boost economic activity with government spending on infrastructure expected to increase in coming months.
He also said inflation could possibly fall below the low end of the 2 to 4 percent target for the year, although there could be price rise risks from a prolonged period of El Nino-influenced weather.
“Right now, as we see it, inflation expectations are well-anchored,” Tetangco said in an email to reporters. “There is still also no strong impetus to provide support to growth.”
The central bank kept its benchmark interest rate steady at 4.0 percent for a fifth straight meeting on May 14, and will meet next on June 25 to review policy. (Reporting by Neil Jerome Morales; Additional reporting by Karen Lema; Writing by Karen Lema; Editing by Simon Cameron-Moore)