Philippines GDP likely to grow by 7.1% next year

CEBU, Philippines —  Security Bank projects a 7.1 percent GDP (Gross Domestic Product) growth by 2021 due to base effect and faster recovery trajectory on the back of a vaccine.

“The US Market and news on developments surrounding the COVID-19 vaccine are key market movers in the country. As recovery and vaccine optimism fades in the short term, we saw spreads in dollar-denominated fixed income (ROPs) widen again but already hold at the tightest levels since the pandemic started. This may indicate significantly better confidence in Asia’s credit space,” said Security Bank’s EVP and Treasurer Raul Martin Pedro during the recently held Economic Forum.

Following the success of its economic forum with Department of Finance Secretary Sonny Dominguez in August, the second leg of the series featured three industry experts who provided an in-depth discussion of global trends and latest economic and healthcare forecasts.

The bank’s positive GDP outlook for 2021 in the Philippines is also backed up by an outsider economic expert, Leong Sook Mei, ASEAN Head of Global Markets Research at MUFG Bank, Ltd. who said that prospects of economic recovery for the region is seen in light of positive news surrounding COVID-19 vaccine development.

“The new realities of US-China relations and COVID-19 have forced Asian governments to shape up. Relatively strong governments in India, Indonesia, and the Philippines have seized upon their dominant parliamentary presence to initiate changes in their FDI laws or introduce incentives to attract investors,” said Leong.

With vaccines in the backdrop, the economic activities will not fall to the depths of the first wave despite restrictions imposed to fight the renewed outbreak.

“The year 2020 would probably be a year of fiscal consolidation in Asia, as the expectation is for vaccine development, better GDP growth, and increased collection of government revenues,” Leong added.