Standard Charter Bank upgrades Philippines GDP, foreseen growth to 7.1%

Standard Chartered Bank. Photo: ABC 

Standard Chartered Bank has just upgraded its economic growth forecast on Saturday, May 24, for the Philippines this year.

In a report, StanChart stated it hiked its full-year estimation to 7.1-percent from the earlier forecast of 6.7-percent. In light of its full-year upgrade, StanChart sees Philippine gross domestic product (GDP) having expanded in the first quarter at about the same pace as to that 6.5-percent in the fourth quarter of last year.

In sudden growth of the country's economic growth forecast, the bank cited strong growth from both domestic consumption and exports, as well as expectations of a pickup in natural disaster's rehabilitation later in the year.

StanChart also upped its first quarter GDP forecast growth to 2.4 percent from 1.5 percent in the end quarter of 2013.

Sales abroad of Philippine-made goods significantly increased by 6.5-percent in the first quarter. This was despite a new truck ban policy, which implemented by City Mayor Joseph 'Erap' Estrada, that made a bottlenecks in the country’s main cargo port in Manila.

As for domestic consumption, StanChart cited strong motor vehicle sales, which increased about 22-percent in the first four months of 2014. StanChart also cited affirmative revenues amongst the country’s giant companies.

"A measure of economic performance, GDP is the amount of final goods and services produced in the Philippines."

StanChart stated that the Standard and Poor’s recent upgrade of the Philippines’ credit rating would also skyrockets business confidence some time soon, opening its gate to similar upgrades by other major credit rating agencies.

All of these positive factors, along with the steady taper of the United States' Federal Reserve, should lead to the appreciation of the Philippine peso, StanChart said, adding that it now foreseen the exchange rate averaging P43:$1 by the end of 2014 and will eventually slip to P42.75 by mid-2015.

The bank forecast inflation averaging 4.4-percent by this year, which is on the mid-upper of the Bangko Sentral ng Pilipinas’ (BSP) full-year target of 3% to 5%. - Centrio Times

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