MANILA - Amid dreary forecasts made by various international and multilateral organizations, economic research group IDEA (Institute for Development and Econometric Analysts Inc.) is expecting the Philippines to escape recession this year with a 1.74% gross domestic product (GDP) growth.

According to IDEA Chairman and University of the Philippines professor Cayetano Paderanga Jr., the economy is unlikely to enter into a recession as the United States, China, and other nations begin to show signs of recovery from the global slowdown.

"Recession is still possible, but the recovery in the United States, China, and other countries (make it more unlikely)," Paderanga said at the IDEA mid-year economic briefing at the UP School of Economics on Friday.

IDEA is looking at a GDP growth of at 1.39% this year at worst, still leaning towards the higher end of the government's target range of 0.8% to 1.8%. The group's optimistic projection, on the other hand, stood at 1.97%.

Further recovery is seen in the coming years with growth projections of 2.01% and 2.14% for 2010 and 2011, respectively.

International and multilateral organizations have had nothing but bleak growth expectations for the economy, led by the International Monetary Fund at -1% from its previous flat growth forecast. The World Bank has also lowered its growth projection for the country this year at -0.5%, while the Asian Development Bank is mulling to downscale its outlook from the current 2.5%.

Philippine economic growth slowed to a 10-year low of 0.4% in the first 3 months of the year from 2.9% in the same period in 2008. This has prompted the country's economic managers to cut its growth targets to a range of 0.8% to 1.8% from between 3.1% and 4.1%.

Even with the seemingly rosy outlook, Paderanga said IDEA's 2009 growth projection is still conservative as it has yet to consider the effects of election spending on the economy. "The model hasn't fully incorporated election spending. This and (an expected) stronger recovery could push growth upward," he said.

IDEA is expecting the pace of remittances to go steady this year at 1.16% from last year's 15%. The growth of remittance inflows is still positive during the past 5 months at 2.8%, but Paderanga said this is likely to slow starting June this year.

By next year, however, the group is expecting remittance growth to return to pre-crisis levels at 10%.

Exports and imports are seen to post respective declines of 8.86% and 6.23%, a huge improvement from double-digit decreases recorded in the past months. The drop in merchandise exports has eased to 24.7% in June from between 30% to 40% in the previous months. Import decline, on the other hand, has slowed to 24.3% in May from -37.4% in April.

Meanwhile, IDEA said inflation rate is likely to hit 2.9% this year from 9.3% in 2008. In July, Philippine consumer prices slowed to a 22-year low of 0.2%.