Stanchart trims Philippine growth forecast to 6.5% for 2017
The revised projection for 2017 is also slower than the 6.9 percent GDP expansion recorded in 2016 as election-related spending boosted private consumption. File
MANILA, Philippines - British banking giant Standard Chartered Bank (Stanchart) slashed its 2017 growth prospects for the Philippines after a slower than expected performance in the first quarter but still expects the Philippines to be the fastest growing economy in the region.
Edward Lee, head of ASEAN economic research at Stanchart, said the bank now expects the country’s gross domestic product (GDP) to expand by 6.5 instead of 6.8 percent this year.
The revised projection for 2017 is also slower than the 6.9 percent GDP expansion recorded in 2016 as election-related spending boosted private consumption.
“We expect GDP growth to slow in 2017 versus 2016, but to remain the fastest in ASEAN-6,” Lee said the bank’s 2017 mid-year global research briefing yesterday.
The projected GDP growth for the Philippines this year would be faster than Vietnam’s 6.4 percent, Indonesia’s 5.2 percent, Malaysia’s 4.6 percent, Thailand’s 3.5 percent and Singapore’s two percent.
Lee said the country’s growth forecast was slashed to reflect the disappointing GDP expansion recorded in the first quarter due to weak investment growth.
The Philippines emerged as one of the fastest growing economy in the region in the first quarter despite the slowdown in the GDP growth to 6.4 percent from 6.6 percent in the fourth quarter of last year.
Lee sees growth picking up in the second half, boosted largely by the government’s Build Build Build program.
For 2018, Lee said Stanchart expects the Philippines to register a 6.5 percent GDP growth.
Economic managers through the Development Budget Coordination Committee (DBCC) have set a GDP growth target of 6.5 to 7.5 percent for 2017 and seven to eight percent for 2018.
He added household spending would remain steady as remittances from Filipinos abroad are expected to grow between four and six percent this year.
Lee pointed out the bank sees inflation in the Philippines accelerating to 3.1 percent this year due to higher oil prices and transport fares as well as more expensive utility rates.
The Bangko Sentral ng Pilipinas (BSP) has set an inflation target of between two and four percent from 2017 to 2020.
The economist said the BSP is expected to keep interest rates unchanged throughout this year and next year.
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