MANILA — The Philippines is expected to remain the best performing economy in the region expanding by 7 to 7.5 percent in 2018, on the back of massive infrastructure spending, said the investment banking arm of the Metrobank Group.
“The infrastructure spending is quite crucial in the faster growth this year,” University of Asia and the Pacific (UA&P) economist Dr. Victor Abola said in a press briefing on Thursday.
Abola said the government’s “Build, Build, Build” program is “credible”, as spending on infrastructure surged more than three times from PHP175.4 billion in 2011 to PHP847.2 billion in 2017.
“That should more than double by 2022. The big jump really occurs in 2018 where we expected (the infrastructure spending) to be 6.1 percent of gross domestic product (GDP). That’s the government side,” he said.
The Duterte administration plans to spend PHP1.898 trillion for infrastructure by 2022, bringing the infrastructure spending as a percentage of GDP ratio to 7.4 percent.
First Metro Investment Corp. (FMIC) president Rabboni Francis Arjonillo noted that with the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) law, the “Build, Build, Build” infrastructure program is expected to be full steam ahead, which “will surely drive economic expansion further.”
“All engines of growth are up and running at a faster pace. The country’s economy will remain as the best performing in ASEAN, we are experiencing a demographic sweet spot that will continue to push consumption expenditure, there’s a revival in manufacturing, and the country’s external position is strong,” he said.
The FMIC said strong domestic demand and accelerating investments would boost economic growth this year.
Heightened private capital spending, a rebound in exports, stable overseas Filipino workers (OFWs) remittances and business process outsourcing (BPO) revenues and tourism boom are also projected to push growth, it said.
“We don’t see signs of external weakness and property bubble,” added Abola.
The Philippine economy grew 6.7 percent in the first three quarters of 2017 on the back of the recovery in external demand, boosting the achievement of the government’s full-year growth target of 6.5 to 7.5 percent. (PNA)
