MANILA, Philippines – London-based investment bank Barclays Capital further upgraded the country’s economic growth forecast to eight percent this year and five percent next year.
In a report, the investment bank revised upwards the country’s gross domestic product (GDP) growth forecast for the third time. From an original GDP growth target of 4.3 percent, Barclays Capital raised its growth forecast to six percent and then to seven percent late August.
GDP is defined as the value of all the final goods and services produced in a country during a given time period. It also refers to the income of the country as well.
The revised GDP growth forecast of Barclays Capital this year was more bullish than the revised GDP growth target of the Cabinet-level Development Budget Coordination Committee (DBCC) at five percent to six percent instead of 2.6 percent to 3.6 percent this year.
Latest data from the National Statistical Coordination Board (NSCB) showed that the country’s GDP grew by 7.9 percent in the first half of the year from 1.2 percent in the same period last year. The GDP expanded by 7.9 percent in the second quarter of the year after growing by 7.8 percent in the first quarter.
However, next year’s GDP growth target of five percent was slower than the projected growth of seven percent to eight percent set by the National Government through the DBCC.
Earlier, Singapore-based DBS Bank Ltd. upgraded the country’s GDP growth forecast for this year and next year after a surprising economic rebound in the first half of the year as well as the projected investment inflows resulting from the public private partnership initiative of the Aquino administration.
In its Economic Markets Strategy for the fourth quarter, DBS said it has upgraded its GDP growth forecast to 6.5 percent instead of 4.5 percent this year and to five percent instead of 4.9 percent next year.
Despite the upgrade, the Philippines would lag behind its neighbors in Southeast Asia. The country’s GDP growth pales in comparison with that of Singapore’s 15 percent, Taiwan’s 9.5 percent, Thailand’s nine percent, Malaysia’s eight percent, and Vietnam’s 6.5 percent. Indonesia’s GDP, on the other hand, is expected to expand by six percent.
The investment bank believes that the PPP initiative of the administration of President Aquino would help put the Philippines back on high growth path.
The Philippines barely escaped recession after the GDP growth slackened to 1.1 percent last year from 3.8 percent in 2008 due to the full impact of the global economic meltdown.