Expansion of Phl economy to depend on Noy’s successor – Moody’s

MANILA, Philippines - Governance should keep improving if the Philippines wants to sustain its economic gains, but further expansion in the economy will depend on the successor of President Aquino, Moody’s Analytics said yesterday.

Katrina Ell, associate economist at Moody’s Analytics, said in a commentary published yesterday that “President Benigno Aquino is rightly credited with helping turn the Philippines’ economy away from perennial disappointment.”

“Since taking the helm in 2010, Aquino has set the economy on the right course via infrastructure development, with a focus on upgrading transport links; an anti-corruption push; a drive to halt tax avoidance; and improved government coffers,” she added.

The Philippines saw a lackluster economic growth of 3.6 percent in 2011 due to underspending but this accelerated to 6.8 percent last year, breaching government’s target of five to six percent.

The economy further expanded by a surprise 7.8 percent in the first quarter, beating market and government expectations.

Ell, however, stressed that “continued success will depend on who takes the reins when Aquino steps down in 2016.”

Moody’s Analytics expects the Philippine economy to have grown by 7.2 percent in the second quarter, slower than the faster-than-expected 7.8 percent expansion recorded in the first three months of the year.

For the whole of 2013, the research firm expects economic growth at 6.5 percent, within the government’s six to seven percent target but slower than last year’s expansion of 6.8 percent.

“We expect full-year GDP growth to be around 6.5 percent in 2013 and 2014, making the Philippines one of the world’s fastest-growing economies,” Ell noted.