ING sees slower growth for Phl

MANILA, Philippines - ING Bank is reviewing its growth projections for the Philippines to take into account the impact of the recent Super Typhoon Yolanda, a bank chief economist said.

Tim Condon, ING’s regional economist, said “We are reviewing our 7.2 percent forecast for downward revision (consensus seven percent).”

He noted that economies recover quickly from supply shocks like typhoon and producers have a strong incentive to restore production to avoid losing their customers. 

“For this reason the forecast for first quarter 2014 growth should be increased by the amount of any typhoon-related cut to the fourth quarter 2013 forecast,” he said.

The ING economist noted that the Philippines’ third quarter 2013 gross domestic product grew seven percent year-on-year, putting the year-to-date growth at 7.4 percent, next only to China (7.7 percent). 

“The government estimates that the super typhoon could slow fourth quarter GDP growth to 4.1-5.9 percent, the low end of which would imply full-year growth of 6.5 percent (the official forecast is 7.3 percent, year-to-date 7.4 percent),” he said.

Condon said they might also adjust their inflation projection. “Supply disruptions from the super typhoons also could cause an inflation spike,” he said.

Last week the BSP raised its 2013 inflation forecast to 3.2 percent from three percent and its 2014 forecast to 4.5 percent from four percent. 

However, Condon said like any hit to growth, an inflation spike would be transitory. 

“(Bangko Sentral) Governor (Amando) Tetangco Jr. said there was no need to adjust policy,” he said.

But he said, “We reiterate our forecast that the BSP will be on hold through the first half of 2014. 

He also said that the typhoons also have caused Philippine financial assets to underperform. 

“We consider the losses a buying opportunity and view yesterday’s 1.9 percent bounce in the PSEi as a hopeful sign that the buying has begun,”he said.

ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to over 61 million private, corporate and institutional clients in more than 40 countries. 

ING Bank in Asia is part of ING Group covering Commercial, Retail and Direct Banking in Asia Pacific. Globally, ING Commercial Banking has an international network in 40 countries with key positions in Structured Finance and Financial Markets. 

Present and active in 14 major economies, namely Australia, China, Hong Kong SAR, India, Indonesia, Japan, Malaysia, Mongolia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam, ING CB provides in-depth client coverage, local knowledge and product expertise in key Asia Pacific markets.