Sun Life Investment Management and Trust Corporation (SLIMTC) projects the economy to expand by 6.2 percent this year due to slow peso weakening and lower interest rates.
Last year, the average economic growth stood at 5.6 percent based on data from the Philippine Statistics Authority.
SLIMTC president Michael Enriquez said household and corporate spending could continue as the average inflation settles at 3.1 percent, below the 3.5 percent outlook of the Bangko Sentral ng Pilipinas (BSP).
“As long as the peso depreciation is slow and steady, I think it should not affect inflation too much compared to wild swings,” he said Friday in a media briefing at Makati Shangri-La.
The trust company sees the Philippine peso-US dollar exchange rate this year falling between P58 to P61 per dollar, signaling relatively manageable prices for imports.
The exchange rates have been hovering at the 57 levels this week based on data from the Bankers Association of the Philippines.
Enriquez said the BSP might conduct a minimal intervention in foreign exchange as the inflation outlooks remain within the 2 to 4 percent target of the central bank.
To drive higher consumption of goods and services, he said the BSP might impose two to three more cuts in its policy rate for loans from 5.75 percent to 5 to 5.25 percent by year-end.
SLIMTC portfolio manager Patrick Ella also said a drastic reduction in the country’s exports to the United States is unlikely, even with Trump’s high-tariff policies.
“Trade might not be impacted that much. In terms of Trump policies during his first term, exports grew 45 percent versus the level during Obama’s term,” he said.
US President Donald Trump has been targeting Canadian and Mexican goods for a 25 percent tariff, which the White House said is a way to stop the countries’ trade of fentanyl, a powerful and addictive drug, to the US.
Trump also ordered a 10 percent tariff on Chinese products due to allegations of intellectual property theft and espionage into American businesses.