MANILA, Philippines - The seven-percent growth in the third quarter has proven that the economy is resilient and sustainable, the asset and management group (AMG) of the Bank of the Philippine Islands (BPI) said.
BPI-AMG is projecting that full-year growth for this year will be at 7.1 percent, with the gross domestic product (GDP) expanding by 6.1 percent in the last quarter.
For next year, the BPI unit is forecasting a growth of 6.7 percent, well within the government’s targeted range of 6.5 percent to 7.5 percent.
In 2015, GDP will continue to grow by 6.5 percent to seven percent.
According to BPI-AMG the impact of typhoon Yolanda will be limited as the areas affected account for just 12 percent of GDP and that the main economic activity in the region is agriculture, which comprises only nine percent of GDP.
However, inflation is expected to rise due mainly to base effects. “We forecast inflation to average at 2.9 percent in 2013 and 3.6 percent in 2014,†the BPI-AMG said.
Remittances from overseas Filipinos is forecast to be strong due to support sent to the devastated areas and the tail-end of holiday spending.
Meanwhile, the demand for Filipino workers remain upbeat.
“Against this backdrop, personal spending is projected to grow by at least six percent in 2014,†the BPI group said.
Moreover, reconstruction work on typhoon-stricken areas would provide a boost both in government and public infrastructure spending. However, bulk of the reconstruction will be done in the second half, which may translate to higher year-on-year growth.
Government is planning increases of 12 percent and 35 percent in government spending and capital outlays, respectively, for 2014.
Investments will remain supported by both public and private infrastructure spending.
The public-private partnership (PPP) programs, is expected to provide an additional P153.7 billion boost to infrastructure spending.
On the production side, agriculture is expected to pick up in 2014 on the back of greater productivity. However, this is partially offset by the slower agriculture production in the Visayas region.
Earlier, JPMorgan Chase Bank NA scaled down its GDP outlook to 6.9 percent from its earlier 7.1 percent, but strengthened its 2014 from 5.6 percent to six.
The Australia and New Zealand Banking Group Ltd. (ANZ) revised its outlook to 6.8 percent for 2013, from its earlier 7.1 percent. But its 2014 outlook was more positive to 6.9 percent.
HSBC and Socio-Economic Planning Secretary Arsenio M. Balisacan placed their bets at around seven percent this year, or the high end of the government’s six- to seven percent.