The financial community and their analysts project sustained growth for the Philippines averaging above 6 percent this year, based on the considered opinion of some of the more active thought leaders in the sector.
This developed even as the economic managers recalibrated the country’s local output growth or the gross domestic product (GDP) in the April-to-June quarter to 6.2 percent vice the 6.0 percent expansion reported earlier.
According to the Philippine Statistics Authority (PSA), the recomputed output growth of the Philippines for the period was based on updated numbers in real estate, renting and business activity as well as in mining and quarrying.
The statistics office likewise reported a recalibration in net factor income whose growth was put at only to 4.1 percent from 4.7 percent originally. The net factor income relates to what is left after deducting payments made to foreign investors from the country’s earnings from its own overseas placements.
Of the various economists the Daily Tribune sought to comment on continued economic expansion in the Philippines, the most sanguine was expressed by Guian Angelo Dumalagan, chief economist at the Land Bank of the Philippines, who projected GDP growth averaging 6.7 percent in the July-to-September quarter.
Dumalagan’s optimism was based on accelerated spending by both the government and its ambitious “Build Build Build” initiative as well as that of the private sector.
This was also the basis for the continued optimism on the country’s economic health by the sovereign debt watcher Moody’s Investors Service who earlier said the $314 billion economy will likely expand by 6.8 percent this year.
Its subsidiary research and advisory unit Moody’s Analytics was more reserved in its projection, saying local output expansion for the Philippines this year should not top 6.3 percent.
But analysts at Union Bank of the Philippines led by Carlo Asuncion, its chief economist, said growth in the third quarter should average 6.6 percent. His optimism was based on hefty government spending data and the continued expansion of the industry sector.
Government spending accelerated to P308.02 billion in the second quarter from only P236.74 billion a quarter earlier, based on data from the Bureau of Treasury.
ING economist Nicholas Mapa projects local output expansion averaging at least 6.3 percent in the third quarter this year owing primarily to household spending, capital formation growth and government spending.
“The Philippines will post another quarter or above-six percent growth although we may have to see government spending step in to offset a projected slowdown in consumption,” Mapa said.
At the recently concluded public forum, Maybank Global Thematic macroeconomist Chua Hak Bin forecasted a 6.3 percent GDP expansion for the Philippines, saying the economy has proven resilient even with the economic uncertainties in the global and domestic horizon.
“My guess is that growth will slow down a little bit because of the typhoon, the trade war.
We can’t foresee for sure but it will still be one of the strongest growth rates above (and) probably close to six percent,” Chua said.
On the headline inflation print that has gone off the rails, the Maybank macroeconomist supports the notion this may have peaked already.
“My own sense is that inflation has probably peaked and I see sound inflation numbers coming from the other countries. I think inflation pressures kind of receded,” according to Chua.
The analyst least sanguine about the performance of the economy in the third quarter was Michael Enriquez, chief investment officer at Sunlife Canada Philippines Inc. who said while the economy continues to expand, the corrosive impact of above-target inflation has exacted a heavy price on growth.