Maybank sees faster Philippine GDP growth

SINGAPORE – The Philippines is poised to be at the forefront in terms of economic growth among members of the Association of Southeast Asian Nations (ASEAN) with the massive infrastructure buildup being undertaken by the Duterte administration, Maybank Kim Eng Group said.

On the sidelines of the Invest ASEAN 2018 conference,  Maybank International Bank Berhad regional head of economic research Suhaimi Ilias said the gross domestic product (GDP) of the Philippines would expand seven percent this year after easing to 6.7 percent in 2017.

The Philippines has booked 76 quarters of uninterrupted growth as GDP grew 6.6 percent in the fourth quarter of last year from seven percent in the third quarter.

Last year’s GDP growth of 6.7 percent was well within the government’s 6.5 to 7.5 percent target, but was lower than the 6.9 percent expansion recorded in 2016 that was boosted by election-related spending.

 For 2018, Philippine economic managers see GDP expanding between seven and eight percent.

“I think the key factor behind that is we believe we are going to see a much more visible impact of President Duterte’s Build Build Build infrastructure program this year,” he said.

The current administration has committed to ramp up infrastructure projects where it intends to spend P8.4 trillion until President Duterte ends his term in 2022.

“The program has been talked about for quite some time but I guess nothing has significantly materialized  over the past year.  But having said that, the Philippine economy has been doing well

The Philippines together with Malaysia, Thailand, Singapore Indonesia, and Vietnam comprise ASEAN-6.

Last year, Vietnam’s GDP growth outpaced that of the Philippines at 6.8 percent.

The Philippines is likely to retake the crown this year as the projected seven-percent growth for the country is above the projected 5.2 percent expansion for ASEAN.

Ilias  said the Philippine economy would continue to benefit from the recovering economies of the US, Eurozone, and Japan.

He said another positive factor is the implementation of the tax reform law under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law that is expected to yield P90 billion in additional revenues.

Ilias also doused concerns of overheating as the country’s credit to GDP as well as money supply to GDP ratio remain manageable compared to the levels experienced by ASEAN members during the Asian financial crisis in 1997 and 1998.