Modest growth seen this year

MANILA, Philippines - The country’s economic growth is expected to remain modest this year due to   dismal export growth as well as the continued volatility of global oil and commodity prices.

ATR KimEng Securities Inc. head for research Luz L. Lorenzo and Maybank Investment Bank Berhad chief economist Ilias Suhaimi in separate presentations came out with similar analysis of the Philippine economy.

Lorenzo and Suhaimi were among a panel of presentors during the economic forum of Maybank Philippines last Friday at the Filipinas Heritage Library in Makati City.

The growth in the country’s gross domestic product (GDP) is expected at 3.5 percent this year, a slight dip from the 3.7 percent growth recorded last year.

 “But, the Philippine economy will reflect much higher growth in 2013-2014,” Lorenzo said.

 The most awaited “event” is the Philippines will get an investment rating upgrade by any of the international credit rating agencies such as Moody’s, S&P or Fitch.

 “The mere anticipation that the Philippines will get the investment upgrade, already excite the market,” Ilias said.

Government spending in 2012 will likely reverse from the inactivity in the past two years.

But private construction activity is seen slowdown this year, thus offsetting increased public spending, especially in the infrastructure segment.

In the second semester of 2012 and most of 2013, construction spending for both government and private sectors is seen to be moving in the same direction and at the same rate.

 Remittances, although slowing down, will still contribute significantly to the economy and personal spending.

Meanwhile, Lorenzo said that the peso would remain in the 42.70 to 43 to the dollar range. The country’s gross international reserves will increase to $82 billion this year, from a robust $75.3 billion in 2011.