The government may soon follow multilateral agencies in lowering growth projections this year, following a dismal 0.4-percent growth in gross domestic product (GDP) for the first three months of 2009, Socioeconomic Planning Secretary Ralph Recto announced Monday.

"Chances are there will be downward revisions of the targets...Realistically, it has to be downscaled," he said, adding that the Development Budget Coordination Committee (DBCC) has yet to arrive at specfic growth numbers. DBCC is the inter-agency group that sets the country's macroeconomic assumptions.

Despite this, Recto expressed optimism that the economy would perform better in the next three quarters of the year, saying that the easing inflation rate and lower interest rates would boost consumer spending for the rest of the year.

“If we did not do the economic resiliency plan, we would have had negative growth...But we could do better than 0.4 percent growth,” he said.

Last week, the National Statistics Coordination Board (NSCB) reported a 0.4-percent GDP growth for the first three months of the year, much worse than the government's 1.8 to 2.8 percent quarterly projection.

But while the country still posted a positive growth, NSCB secretary general Romulo Virola said the Philippines is already on "the brink of recession" not just based on GDP rates but on worrisome May to June leading economic indicators such as money supply, electricity consumption, exchange rate, and tourist arrivals.

Technically, a country slips into recession when it posts negative GDP growth for two consecutive quarters.

International financial institutions have had nothing but bleak forecasts for the Philippines' economic output this year, led by a zero growth projection by the International Monetary Fund from its previous 2.25-percent estimate.
 
London-based Fitch Ratings has also cut its economic growth forecast for the country to only 0.1 percent from 0.5 percent, while the World Bank has projected a dismal growth this year at 1.9 percent. The Asian Development Bank, meanwhile, had a more optimistic outlook for the Philippines with a GDP growth of 2.5 percent.
 
Still, all the projections were a far cry from the government's current target range of 3.1 to 4.1 percent for 2009.