Economy seen growing faster at 6.3% this year

The pace of the country’s economic growth is expected to accelerate to 6.3 percent this year on the back of robust private consumption and an improvement in public spending, according to ATR Asset Management (ATRAM).

Ivan Ante, global multi-asset portfolio manager at ATRAM, said the country’s gross domestic product (GDP) growth is expected to improve to 6.3 percent this year, although still lower than the government’s 6.5 to 7.5 percent target range.

 “Last year, GDP disappointed because government did not spent. But this year, we think all the unspent budget last year will be spent this year. At the same time, the new budget will be also spent,” Ante said during Insular Life’s forum on the 2020 Economic Outlook yesterday. 

 “We expect GDP to grow by 6.3 percent this year. Where will it come? From robust consumption, which is the first pillar of growth. And the second is the comeback of government expenditure,” he said.

The delay in the passage of the 2019 budget last year pushed back government disbursements, which put a dent on the country’s GDP growth. 

Ante also said ATRAM expects the peso-dollar exchange rate to weaken to a range of 51.5 to 52 versus $1 this year.

 “For policy rates, we think they (BSP) are going to cut again two times or 50 basis points this year. We also think they are going to cut the reserve requirement ratio by two percentage points. That’s additional liquidity to the system most importantly for growth,” Ante said.

 The economy expanded by six percent in the third quarter of last year, the same as the six percent recorded in the same quarter of 2018 and higher than the 5.5 percent in the previous quarter.

 Bangko Sentral ng Pilipinas Governor Benjamin Diokno earlier said the country’s GDP likely expanded between 6.4 and 6.5 percent in the fourth quarter of 2019, bringing the full-year growth to six percent.