Phl GDP growth likely to hit low-end of target

CEBU, Philippines - The Philippine government expects to hit the low-end of its 6.8-7.8 percent target for gross domestic product (GDP) growth this year, a top official said Thursday.

Economic Planning Secretary Emmanuel Esguerra said the Philippines is still expected to remain one of the fastest growing economies in Asia. He was the keynote speaker of the Visayas Shipping Conference held in Cebu City yesterday.

That projection is supported by International Monetary Fund which sets a 6 percent growth target for the Philippines this year and 6.2 percent next year, the second fastest in Southeast Asia.

In whole of Asia, India is the fastest growing while it's Vietnam in the Southeast Asian region.

The median forecast of various investment banks and credit rating agencies is that the Philippine economy will grow 6 percent this year and next.

DRIVERS

On the demand side, Esguerra said private consumption will continue to drive the economy, boosted by remittance inflows, strong consumer confidence, low inflation and low interest rates.

Other expected drivers include the expectation that government soldier will continue to increase, investment both public and private construction and exports of services such as business process management and tourism.

On the  supply side, the economy is expected to get a boost from low petroleum prices, construction and infrastructure development, international and domestic tourism, wholesale and retail trade and manufacturing resurgence, said Esguerra, who is director general of NEDA.

The BPO sector is also expected to continue fueling the growth of real estate, renting and business activities sector.

RISKS

Esguerra said the country's economy remains vigilant and well-positioned against the downside risks to growth.

He cited that external headwinds could come from the fragile growth in Japan, slowdown in large emerging economies particularly China, geopolitical tensions in Middle East, maritime dispute in West Philippine Sea and asynchronous monetary policies in major developed countries.

Domestic risks, on the other hand, would stem from natural calamities like the El Niño, possible La Niña in the second semester of 2016, disruptions in peace process, delays in infrastructure and reconstruction projects, logistics bottlenecks and thin power reserves. (FREEMAN)