Manila - Philippine economic managers on Wednesday cut domestic growth forecasts for this year and 2009 amid grim prospects of recession in some of the world's largest economies.

Gross domestic product (GDP) in 2008 was forecast to grow only between 4.1 per cent and 4.8 per cent, down from the government's earlier target of 5.5 per cent to 6.4 per cent.

Budget Secretary Rolando Andaya said GDP growth next year was expected to average between 3.7 per cent and 4.7 per cent, from the previous forecast of 6.1 per cent to 7.1 per cent.

"Against a backdrop of recession expected in some of the world's largest markets, we have to be realistic with our expectations for our economy now and in the coming year," he said.

Exports, a key driving factor for the Philippine economy, were expected to grow by only 2 per cent to 4 per cent in 2008, compared to an initial projection of 5 per cent.

In 2009, exports are forecast to grow between 1 per cent and 3 per cent, down from 7 per cent initially.

"Given the extreme volatility in the global economy, we are taking a conservative stance in our economic projections," Andaya said.

While the economy was expected to slow down, Socio-Economic Planning Secretary Ralph Recto allayed fears of businessmen that the Philippines will face a recession next year.

"Recession means no jobs will be created next year and I don't see that happening," he said. "There will be a slowdown. There is a slowdown this year already. But we don't expect a recession."

A survey by the Makati Business Club showed that 87 per cent of businessmen in the Philippines expect a recession in 2009 due to job cuts and a credit squeeze.

Sixty per cent also expected their company's workforce to contract next year as they plan to cut capital expenditures.

Last year, the Philippine economy grew a robust 7.2 per cent, its best performance in over three decades. (dpa)