Experts from UA&P and research partner First Metro Investment Corp. (FMIC) expect the Philippine economy to grow by at least 6.5 percent this year and outperform its Asian neighbors.
Dr. Victor Abola of the School of Economics (SEC) noted the range would be 6.5 percent to 7 percent in terms of the gross domestic product (GDP), and even higher after 2016.
“A 7- to 8-percent GDP growth with low inflation is doable for post-2016. Think that 2016 will prove most of the organizations wrong because most of them have been upgrading to 6.2 percent. We already got 6.9 [percent] in the first quarter. So for the second quarter, I assure you that it’s going to be robust,” he explained.
The main drivers would be strong economic fundamentals—election-related spending, increased domestic demand, consumer spending, higher government spending, and overall optimism on the administration of President Rodrigo Duterte.
“Fueled by consumer spending which is rising very fast,” he said.
He also told reporters that he does not see any big jump on the Philippines’ foreign direct investments (FDI) “soon” as investors take on a wait-and-see stance on the Duterte administration.
FDIs to the Philippines posted its record-high net inflows in April 2016 at $2.2 billion, data released by the Bangko Sentral ng Pilipinas (BSP) showed. The net inflows in the fourth month this year grew by 476.1 percent from year-ago’s $382 million. It is also higher than last March’s $364 million.
Dr. Abola is optimistic that further improvement in the FDIs may materialize in the first half of the Duterte administration’s six-year term “as the President makes doing business easier and there have been a lot of changes in the rules of the game.”
“I would think it can happen in the first half… Depends on how the cards are played but so far, statements are very good and let’s see the follow through in terms of actual action on the ground,” he added.
In an appearance on ANC’s “Market Edge with Cathy Yang,” Dr. Abola talked about the Philippines asserting its right to exploit oil and gas reserves in the South China Sea.
“We may be able to do some drilling in that area,” he told ANC.
Beijing will be under international pressure to comply should the Permanent Court of Arbitration based in The Hague uphold Manila’s entitlements to its 200-nautical mile exclusive economic zone, portions of which are being held by the Chinese.
- FMIC and UA&P forecast PHL to outperform Asian neighbors (July 11, 2016)
- Economy forecast to grow by 7-8% starting next year (July 12, 2016)
- Philippines can pursue oil exploration with arbitration win: analysts (July 12, 2016)
- PH posts record-high $2.2-B foreign direct investments in April ’16 (July 12, 2016)