HSBC Upgraded Philippine Economic Growth Forecast 6.3 - 6.5 Percent

Null

HSBC hikes anew Philippine growth forecast to 6.5%

The Hongkong and Shanghai Banking Corp. Ltd. raised anew the country’s economic growth forecast as the Philippines continued to stand out as one of the strongest performers in Asia.

In its latest Asian Economics report for the fourth quarter, HSBC economist Joseph Incalcaterra said the country’s gross domestic product (GDP) growth projection has been revised upwards to 6.5 percent instead of 6.3 percent this year due to the stronger-than-expected expansion in the first half.

The country’s GDP growth accelerated to seven percent in the second quarter of the year from 6.8 percent in the first quarter amid the strong boost from election related spending.

This brought the GDP expansion in the Philippines to 6.9 percent in the first half from 5.5 percent in the same period last year.

“The Philippines continues to stand out as one of Asia’s strongest performers. Following the strong outturn of growth in the first half of 2016, we recently raised our full-year forecast from 6.3 percent to 6.5 percent,” he said.

The bank sees the country’s GDP growth easing to 6.4 percent in the third quarter and to six percent in the fourth quarter.

“Although growth will moderate in year-on-year terms through the second half as the impact from the elections and budget front-loading wears off, overall domestic demand will nonetheless remain resilient as government spending continues to fuel growth,” Incalcaterra said.

Likewise, HSBC retained the GDP growth forecasts for 2017 and 2018 at 6.3 percent and 6.4 percent, respectively.

“This isn’t to say there aren’t challenges to growth. After all, exports have been contracting rather sharply as of late – while imports of capital equipment surged – and the trend growth of remittances has also moderated to approximately 3.5 percent,” he said.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed cash remittances contracted 5.4 percent in July, bringing down the growth in the amount of money sent home by Filipinos abroad to three percent in the first seven months of the year.

Authorities believe the growth in receipts from the business process outsourcing (BPO) as well as tourism sectors would cushion the slowdown in the cash remittances.

“While remittances may not provide the same boost to consumption as before, we think that the improvement in domestic employment opportunities, mostly from construction, BPO and tourism, are more than able to offset the effect for now,” he said.

The economist noted long-term issued such as the structural trade deficit as well as the not too bright outlook for manufacturing exports outside of electronics.

He pointed out the Philippines would remain highly vulnerable to weather trends with the onset of La Niña after the bout with El Niño. - philSTAR

Share on Google Plus

About Webber

I am among of the writers and administrators of this web site. I always on the heads up when it comes to Sports, Politics, Economy, Business, Physics, Mathematics, Technology, computers and NEWS all over the world that triggers ny eyes and interests. I am working as a volunteer with other 14 administrators, researchers, writers and contributors. We are a strong solid team. Join us and be among of the contributor with your name on each posted article.

    Anonymous or Google Comment
    Facebook Comment

YOU MAY LIKE TO READ

LEARN FOREX TRADING AND GET RICH

Investment Recommendation: Bitcoin Investments

Live trading with Bitcoin through ETORO Trading platform would allow you to grow your $100 to $1,000 Dollars or more in just a day. Just learn how to trade and enjoy the windfall of profits. Take note, Bitcoin is more expensive than Gold now.


Where to buy Bitcoins?

For Philippine customers: You could buy Bitcoin Online at Coins.ph
For outside the Philippines customers  may buy Bitcoins online at Coinbase.com