MANILA — First Metro Investments Corp. (FMIC) and University of Asia and the Pacific (UA&P) remain optimistic about achieving faster Philippine economic growth this year.
In the latest issue of The Market Call, they believe the 7 to 8-percent government target this year would be “doable” given the strong domestic demand due to acceleration in the government’s “Build-Build-Build” infrastructure program, ensured by the passage of the tax reform program and recovery of private construction.
FMIC and UA&P are confident the capital goods spending will continue expanding this year, as the infrastructure program goes full-speed ahead and the private sector expands manufacturing and mining capacities.
“Accelerating infrastructure spending and likely double-digit growth of capital goods imports in 2018 should combine with robust export growth to drive faster GDP (gross domestic product) growth in 2018,” they said.
FMIC and UA&P attributed robust export demand due to the synchronized upswing of advanced economies.
“We believe that global recovery in some markets (US, European Union, China and Japan) will continue to prop up export demand from Philippines and will bring 2018 exports to a faster growth pace,” they added.
The country’s GDP expanded by 6.6 percent in fourth quarter of 2017 from previous quarter’s 6.9 percent, on the absence of election-related spending.
Full-year 2017 economic growth averaged 6.7 percent, making the Philippines still among the fastest growing economies in Asia.
FMIC and UA&P also expect inflation hovering around 4 percent in first half of 2017 and decelerating in the second half, as “crude prices stabilize or even decline, while producers and consumers tweak their adjustment to the Tax Reform for Acceleration and Inclusion’s (TRAIN) initial effects.”
The country’s inflation rate surged to 4 percent in January mainly due to higher crude oil prices and indirect taxes of TRAIN. (PNA)
