'16 polls not a cause of concern vis-a-vis PHL growth – ANZ

October 29, 2015 5:42 am 

By Joann Santiago

MANILA, Oct. 28 (PNA) — Australia and New Zealand Banking group (ANZ) does not see big risks on the Philippines' fundamentals vis-a-vis the 2016 national polls, citing that the economy's strength has been in place even before 2010.

In a research note, the financial institution said the domestic economy's fundamentals "which led to the country's increased GDP (gross domestic product) growth and relative stability, especially over the last five years, have been firmly entrenched in the country's institutions."

"In our view, the wheels of improvement in economic fundamentals were already in motion even before the Aquino administration came into power in June 2010," it said.

ANZ' assessment was based on several factors that include the sustained domestic expansion for about a decade now.

Domestic growth has been rising since about a decade ago at an average rate of three percent.

However, average growth surged to around five percent average in the last five years making the country among the brightest in the region after China, the world's second largest economy.

This development was partly attributed to the business process outsourcing (BPO) sector, which started operations in the early part of 2000.

To date, the BPO sector is considered as among the major growth drivers of the economy not only due to sustained rise in BPO receipts but also because of its multiplier effect on economic activities.

The research note also cited that investment, despite its volatile nature, has been rising since 2001.

Government debt has also been declining since 2004 and this is among the factors seen to sustain the narrowing budget gap of the government.

Thus, ANZ said that "regardless of who wins the presidential elections in May 2016, we believe the Philippines is well-positioned to maintain its growth momentum and outperform its regional peers, even amid fears of China's slowdown."

"In sum, we believe that most of the structural changes in the Philippines needed for economic advancement were already in place before President Aquino assumed power in 2010."

"While an improvement in local sentiment had also supported growth during the Aquino administration, we see little risk of a reversal in the country's growth momentum even after President Aquino steps down in June 2016," it added. (PNA)

RMA/JSV/RSM

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