MANILA - Growth targets will likely be trimmed anew this week in the wake of disappointing first-quarter economic growth, which had prompted some officials to declare the country as on the brink of a recession.

A Development Budget Coordination Committee (DBCC) technical group is scheduled to meet today to finalize its assumptions, which will then be submitted to the interagency panel for approval tomorrow, Finance Undersecretary Gil S. Beltran said.

"Yes [there will be revisions] ... The technical working group will meet on Monday and the DBCC will meet on Tuesday to revise the current program and come up with a firmer program," he told reporters on Friday.

Another member of the DBCC — which consists of the National Economic and Development Authority (NEDA), Bangko Sentral ng Pilipinas (BSP), and the Budget and Finance departments — said revisions to all "macroeconomic parameters" were needed.

"We will be revising all the macroeconomic parameters including the growth rate because of the first quarter performance. We have been doing simulations and we definitely need to lower the growth target because of the economic downturn," NEDA Deputy Director-General Augusto B. Santos said in a telephone interview yesterday.

He said this year’s P199.2-billion deficit cap could also be widened but stressed that a final decision had not been made.

"I would not want to change it (the deficit ceiling) ... but if a higher deficit would yield a higher growth then I have no objection to that," he said.

The National Statistical Coordination Board (NSCB) last week reported that the economy grew by just 0.4 percent in the first quarter, dragged down by the global downturn.

The result was well below the government’s forecast of 1.8-2.8 percent. Seasonally adjusted, gross domestic product (GDP) actually contracted by 2.3 percent from the fourth quarter, which prompted the NSCB to warn of a possible recession.

In the wake of the report, Socioeconomic Planning Secretary Ralph G. Recto said economic managers would likely reduce this year’s 3.1-4.1 percent growth target. He also said the budget deficit may exceed the current goal of 2.5 percent of GDP to 3 percent.

The 2009 growth target has been downscaled three times since last year: From the original 6.1-7.1 percent, it was cut to 3.7-4.7 percent, then to 3.7-4.4 percent and to 3.1-4.1 percent at the latest. The fiscal gap has also been adjusted thrice, from P40 billion to P102 billion, to P177.2 billion, and to the current P199.2 billion.

During the weekend, meanwhile, central bank government Amando M. Tetangco, Jr. rejected talk of a recession occurring this year.

He said the economy was still supported by strong remittances from overseas Filipinos and a sustained deceleration in inflation would boost domestic consumption, a major driver of growth.

"At this time, [there will be] no recession," he told reporters when asked if the country would likely suffer the same fate as its neighbors Japan, Singapore, Hong Kong, Thailand and Taiwan, pushed into recession by the worst global economic crisis in decades.

An economy is generally considered in recession after posting two consecutive quarters of contraction but Mr. Tetangco said that definition was very limited, adding there should be more signs of a widespread deceleration in economic activity.

Remittances are expected to stay flat at $16.4 billion in 2009 from a year earlier, according to central bank estimates, better than the 5 percent contraction predicted by economists in a Reuters poll last month.

Officials said last month that Filipinos receiving remittances from relatives abroad were saving rather than spending their money due to uncertainty over the depth of the global recession, but Mr. Tetangco said the slowdown in inflation should encourage people to spend more.

The annual inflation rate in May fell to a one-and-a-half-year low of 3.3 percent and the government has said it expects the rate to hit zero in the third quarter, giving monetary authorities scope to cut rates further to lift economic growth.

"At the moment, our assessment is that the risks to inflation are low, and we have room to ease further, being mindful however that liquidity does not become excessive," Mr. Tetangco said.

Last month, the central bank delivered its fifth consecutive rate cut since December, taking the key overnight borrowing rate to 4.25 percent, a 17-year low.

Most analysts think the central bank will cut rates one more time to 4 percent at its next policy meeting on July 9 to guard against potential price pressures from increasing oil prices. —With a report from Reuters