MANILA, Philippines - Philippine economic growth could reach “about six percent” this year, the International Monetary Fund (IMF) said yesterday, with the public and private sectors optimistic the momentum will continue in 2013.
“We have not revised it yet but probably about six percent for the whole year,” IMF resident representative Shanaka Jayanath Peiris said in an economic forum in Makati.
The latest outlook was up from IMF managing director Christine Lagarde’s forecast of “in excess of five percent” announced last month when she visited Manila. It was also stronger than the original 4.8 percent contained in the agency’s World Economic Outlook (WEO) last October.
The revision also hit the upper-end of the government’s five to six-percent target for the year. Economic growth hit 6.5 percent in the first nine months after a surprising 7.1-percent expansion in the third quarter.
“There was a strong third quarter growth so we will just tick it up higher,” Peiris told The STAR after the forum. The WEO’s January edition will reflect the changes.
The 2013 growth projection will also be upgraded “in the next few weeks,” Peiris said noting that “changes will have to be made to consider stronger base.”
At yesterday’s forum, Peiris also highlighted the economy’s “modest” growth amid a general slowdown in emerging markets such as China and India as well as the financial turmoil in Europe and the US.
Consumption, which accounts for the bulk of the economy, worked well to support growth, he explained, saying exports have so far been still weak as demand slackens in crisis-stricken developed markets.
For next year, Sittie Hannisha Butocan, deputy director of the BSP’s economic research department, cited the continued flow of remittances from overseas Filipinos which held up consumption growth.
Remittances, which grew 5.5 percent as of September, have been “surprisingly resilient,” according to her, and that they are expected to expand still in the next year.
Construction will also play a major role, Butocan said, as government remains on spending mode as more projects under the public-private partnership (PPP) initiative kick in. So far, only two PPP projects have been awarded since the program’s launch in November 2010.
Other key drivers include tourism, agribusiness, the rental industry and the “flourishing” business process outsourcing sector, she said. Manufacturing could also be counted “in account of expected improvement in the export sector.”
All of these will translate to more investor confidence with the benchmark Philippine Stock Exchange index (PSEi) expected to hit 6,100 level next year, said April Lynn Lee-Tan, president of the Chartered Financial Analysts Society of the Philippines.