MANILA - A United Nations agency has forecast faster growth next year for the Philippines and other export-driven economies in the region, but warned that the downturn might make a comeback if government stimuli fail to stick.

The Philippines is projected to post 3.5% growth in 2010 after likely ending 2009 with a 1.6% rise in output, the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) states in its annual "Economic and Social Survey of Asia and the Pacific" scheduled for release today.

The estimates echo forecasts made by the International Monetary Fund, Asian Development Bank and the World Bank of a near flattening in output this year and 2010 growth ranging from 3.1-3.5%.

It also falls within the government’s projections: 0.8-1.8% in 2009 and 2.6-3.6% in 2010.

Among the 11 economies listed in the UNESCAP report, China, India, Indonesia, and Hong Kong lead the pack with 4-9% growth expected for 2010. Indonesia, in particular, will be buoyed by strong domestic demand, the report stated.

The Philippines, meanwhile, shares its 3.5% growth forecast with Malaysia, Singapore, and Taiwan, and to some extent Thailand (3.2%). Southeast Asia in general will enjoy growth of 4% in 2010 "due to improvements in the export sector."

But next year’s uptick will not match pre-crisis levels since markets will likely temper spending and also face pressure to prioritize locally made goods, UNESCAP said.

"In this respect, renewed efforts to obtain a conclusion of the Doha Round [for a global free trade pact] in accordance with its development mandate by 2010 are important ... An additional promising route for mitigating the decline in the role of exports to developed countries is to increase the share of intraregional trade and domestic demand in providing markets for local producers," it advised.

Aside from a shaky recovery in export sales, UNESCAP cited other threats to the 2010 growth projections: ineffective management of pump-priming efforts, a revived fuel and food price crisis, and pandemics and calamities.

Overstimulated demand in the long-term could cause prices to spike and prompt governments to hike interest rates which could in turn drive away private sector activity, it warned.

"The key question at present is whether growth drivers can self-ignite and remain alight as the government turns off its throttle. Anything less could see the economy falling back quickly into a double-dip recession," it said.

Sought for comment, University of the Philippines economist Benjamin E. Diokno agreed in a text message that recovery could be plagued by weak export sales and an unsustainable government stimulus.

He said the Philippines could grow by 0.5% in 2009 and 2.6% in 2010. -- Jessica Anne D. Hermosa, BusinessWorld