MANILA, Philippines - Deutsche Bank AG slashed its 2015 economic growth forecast for the Philippines but believes the country would still be the bright spot among emerging market economies on the back of its strong macroeconomic fundamentals.
In its latest research note, Deutsche Bank lowered the gross domestic product (GDP) growth forecast of the Philippines to six percent from an earlier projection of 6.3 percent for this year.
Deutsche Bank economist Diana del Rosario said the lower GDP growth forecast was due to the prolonged El Niño phenomenon as well as the economic slowdown in China.
“We have marked down our forecast by 30 basis points on drastically lower domestic output from a strengthening El Niño. The potentially severe dry weather could be another drag to already weak exports, aside from the headwinds due to China’s slowdown and overall weak global trade,” she said.
The country’s GDP growth slowed down to 5.3 percent in the first half from 6.4 percent in the same period last year on the back of weak global demand as well as lack of government spending.
The GDP expansion, however, picked up to 5.6 percent in the second quarter from the revised five percent in the first quarter due to improving public spending.