Goldman Sachs raises Phl growth forecast for 2013

MANILA, Philippines - Global investment bank Goldman Sachs raised its full-year growth forecast for the Philippines as it sees the country sustaining gains made in recent quarters.

Tim Leissner, vice chairman for investment banking division for Asia ex-Japan, said the firm expects the Philippine economy to grow by 6.8 percent this year, an upward revision of its previous forecast of 5.5 percent.

The Philippine economy has already expanded by 7.6 percent in the first half, one of the fastest in the region.

Goldman Sachs’ new forecast falls within the government’s target of a six to seven percent growth this year and matches last year’s 6.8 percent expansion.

“What the Philippines needs to do is to stay the course it is in right now. Continue to do what you’re doing right now, delivering on the promises on macro policies,” Leissner said in a briefing yesterday.

Risks to Philippine growth, meanwhile, remain to be external, such as the partial shutdown of the US government and the US Congress’ need to raise the debt ceiling.

“We’re not so much concerned on the risks but concerned on the momentum (of growth) and keeping them for our clients,” Leissner said.

Leissner expects an increase in portfolio and direct investments as the country outperforms other peers in the region.

With regard to the recent investment grade rating, Leissner said this will help attract more investments into the Philippines.

Moody’s Investors Service last week gave the Philippines a Baa3 rating with a positive outlook. This came months following investment grade ratings from Fitch Ratings in March and Standard & Poor’s in May.

For next year, Goldman Sachs forecast the Philippine economy to grow by 5.5 percent, below the government’s target of 6.5 to 7.5 percent.

Leissner noted the peso is seen to average at 40 to a dollar during a 12-month period from October, far stronger than its 43.14-per-dollar finish yesterday.