Sun Life exec sees modest GDP growth

MANILA, Philippines – Sun Life Asset Management Co. (Slamci) sees the country’s economy expanding a modest 5.9 percent this year and six percent next year.

Michael D. Enriquez, chief investment officer of Slamci, said their wait-and-see stance on the incoming administration’s growth agenda mainly factored into the modest outlook for the year.

 “We can make the adjustments. We want to see if the government can deliver on its infrastructure spending,” Enriquez said in a press briefing yesterday.

However, he admitted the country’s gross domestic product (GDP) has the potential for a seven to eight-percent growth rate anchored on government’s increased spending on infrastructure, private sector involvement and foreign direct investments (FDIs) reaching record levels.

The outgoing administration had targeted infrastructure spending from 2.2 percent of GDP in 2012 to five percent this year. However, it barely made three percent last year. Despite underspending, the Philippine economy grew an average 6.2 percent in the same period.

“If government only spends, they can bring up their share in GDP, definitely investments will also come as government is actually building capacity, building new roads, building airports ... and then that will attract more investors in the country,” Enriquez said.

He said that one strong indicator is the fact the Davao region had shown strong growth in the past five years and that the incoming president is Davao’s recognized leader.

Davao is the fourth fastest growing region from 2010 to 2014, growing an average 6.5 percent, the same growth rate of Metro Manila.