Philippine economy faces growth threats in 2012

The Philippine economy is facing major risks from abroad that could limit its growth prospects next year, the central bank governor said Wednesday. Although the country enjoys "sound macro economic fundamentals," and strong domestic demand, the economy could still be hurt by developments in Europe, the United States and China, central bank governor Amando Tetangco said. "The 2012 global economic outlook has deteriorated," he said, warning that there would be more volatility and uncertainty that could affect the Philippines. "Although economic growth has slowed, we have not seen a contraction" in 2011, he told a forum of foreign correspondents. The economy grew by 3.6 percent in the first nine months of the year, though the government maintained its full-year target of 4.5-5.5 percent, pinning its hope on a $1.66 billion state spending programme launched in October. Next year's official growth target is 5-6 percent. Tetangco said fears of an escalating debt crisis in Europe, the continuing weak US labour market and the risk of a slowdown in China could weigh on Philippine growth prospects in 2012. They could result in a drop in trade, investment and official aid, he said, warning that even earnings from the country's booming outsourcing industry and the remittances of nine million Filipino workers overseas could be affected.