Economists at the Asian Development Bank project higher growth averaging 6.7 percent this year from forecast growth of just 6.4 percent in 2018. bob dungo jr.

Local output growth, measured as the gross domestic product (GDP), likely accelerated as fast as 6.8 percent in the fourth quarter last year, helping make possible for Manila to post full-year growth averaging 6.5 percent.

Inflationary pressures are expected to taper off next year as tighter domestic monetary policy begins to take effect

This was intimated on Monday by Moody’s Analytics, the non-rating research arm of the sovereign credit watcher Moody’s Investors Service who said this compares favorably, for example, against China’s performance during the period. China’s continuing GDP expansion was seen averaging 6.5 percent for the period.

“GDP growth in the Philippines likely hit 6.8 percent year-on-year in the fourth quarter, after slowing to 6.1 percent in the third.

“Improvement is expected in private consumption after a slump in the third quarter on higher food prices squashing discretionary spending.

“Imports of goods also accelerated to double digits, a consequence of the government’s large infrastructure spending program. Full-year GDP growth remains on track to expand 6.5 percent in 2018,” the Moody’s unit said.

Its growth forecast for the Philippines paints a more optimisitic picture over the same time horizon than that painted by the Manila unit of the Dutch financial services firm ING Group whose economist said GDP expansion for the period was likely below 6 percent.

According to ING Bank senior economist Nicholas Mapa, the Philippines likely grew by only around 5.9 percent in the fourth quarter last year, its output dragged lower by above-target inflation borne of inefficiencies and supply issues at the food sector under the Department of Agriculture.

The inefficiencies have been so blatant as to catch the attention of the normally indifferent President Duterte to the country’s economic woes, having bluntly told Agriculture Secretary Emmanuel Pinol the agriculture sector has dragged the economy lower than its full potential, according also to Budget Secretary Benjamin Diokno.

For Mapa, he traced the forecast slowdown to household consumption having been hit hard by soaring headline inflation averaging well past the 4-percent target ceiling to as high as 6.7 percent last year.

“With inflation zooming past the target, averaging 5.9 percent in the fourth quarter, we can expect this major component of growth to be challenged,” he said.

Previous data show the Philippine starting off 2018 with growth averaging 6.6 percent that quickly tapered to only 6.2 percent in the second quarter and only 6.1 percent in the third.

The economic managers have since justified the country’s performance to the fact that on top of domestic headwinds, global sources of more economic drag include problematic imported oil prices that helped feed inflation fires last year and the slower-than-forecast growth in China which is an important trading partner of the Philippines.

This did not include signals from the US Fed, the world’s most influential central bank and expectations of an interest rate adjustment on its own interest rate structure that keeps investors from making placements in emerging markets as the Philippines.

Even the Manila-based Asian Development Bank has scaled back its forecast growth for the Philippines in 2018 to 6.4 percent from 6.8 percent originally.

It said the recalibration was the result of a “moderation in agricultural output and exports, as well as higher inflation and continued global monetary tightening.

“Inflationary pressures are expected to taper off next year as tighter domestic monetary policy begins to take effect,” it said.

“The Philippines’ growth outlook remains stable despite moderating slightly in the first half of the year, as the country’s economic fundamentals are strong,” said ADB Country Director for the Philippines Kelly Bird. “We’re expecting growth to slowly pick up as public investment in infrastructure and social sectors accelerate and key economic sectors continue to perform solidly.”