Metrobank investment banking arm sees 7-7.5% GDP growth in 2015

January 8, 2015 1:39 am 

MANILA, Jan. 7 — The economy is expected to further accelerate to 7 to 7.5 percent this year on expectations of accelerated government expenditure on infrastructure and rehabilitation projects, making the Philippines still an economic bright spot in Asia, according to the investment banking arm of the Metrobank Group.

“Despite a lower than consensus performance in 2014, the outlook for the Philippine economy in 2015 is very positive underpinned by the strong performance of the private sector and a recovery in government spending and public construction,” said First Metro Investment Corp. (FMIC) president Roberto Juanchito Dispo in a press briefing.

Dispo said government expenditure and pre-election spending, supported by strong domestic demand and favorable growth prospects, will boost the economy this year.

“(We are still optimistic in) consumer, exports, manufacturing and (resurgence in) mining and tourism,” he said.

But while the country’s economic gains in recent years will be sustained from last year’s projected 6.6 to 7.5 percent, Dispo said “critical steps have to be undertaken to ensure that these economic gains will continue to benefit us in the long run.”

He said fighting corruption and instituting good governance for attracting investments are imperative to sustaining economic growth.

The country’s gross domestic product (GDP) averaged 5.8 percent in January to September last year. It grew slower by 5.3 percent in the third quarter brought about by typhoon damage and falling public spending.

Dr. Victor Abola, economist at the University of Asia and the Pacific, said other drivers of this year’s economic growth are expectations of accelerated government expenditure on infrastructure and rehabilitation projects and resurgence of the manufacturing sector.

Abola said that as of December 2014, public private partnership (PPP) projects worth Php127.4 billion were awarded and in progress.

He said more PPP projects costing Php44.3 billion expected work this year can boost the country’s GDP by four percent.

Further, the investment bank also identified possible internal and external factors that may bring downside risks to the economy.

“In the local front, natural disasters, power crisis, continued anemic government spending, and delayed PPP projects could dampen growth,” Dispo added.

He said external threats, on the other hand, include global economic slowdown, sluggish growth in emerging markets, United States interest rates hike and escalated geopolitical tensions in the Middle East. (PNA)

LGI/LDV

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