Despite slowdown, Philippines to lead GDP growth in SE Asia this year

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Citigroup in a new country study said it expects the Philippines to enjoy the fastest economic growth in Southeast Asia and the third-fastest growth in the entire Asia-Pacific region in the second half, mainly because of higher tech exports.

According to Johanna Chua, managing director and head of Asia Pacific Economic and Market Analysis at Citigroup, the Philippines is likely to reach GDP growth of 6.5 per cent in the second half, more than any other Southeast Asian country and just trailing India with 7.5 per cent and China with 6.8 per cent expected growth rates.

In comparison, Vietnam is expected to register GDP growth of 6.4 per cent, Indonesia 5.3 per cent, Malaysia 5.2 per cent, Sri Lanka 4.4 per cent, Thailand 3.5 per cent, Hong Kong three per cent, Korea 2.9 per cent, Mongolia 2.6 per cent, Singapore 2.5 per cent Taiwan 2.3 per cent, Citigroup anticipations show.

However, the bank’s 2017 forecast — which is within the Philippine government’s 6.5-7.5 percent target — represents a slowdown from the actual GDP growth of 6.9 per cent in 2016, but is still substantial. This also corresponds with a recent forecast by Standard Chartered.

This year’s growth in the Philippines is underpinned by higher technology exports, mainly computer chips, and steady remittances from overseas workers, but also to some extent helped by the government’s tax reforms and infrastructure investment.

Other institutions are also cautiously optimistic about the Philippine growth potential.

The International Monetary Fund earlier this week trimmed its 2017 Philippine growth forecast to 6.6 per cent from 6.8 per cent but said the country maintained a stable economy amid global uncertainties. The World Bank’s 2017 forecast is also a lower 6.8 per cent, from 6.9 per cent previously.

The Asian Development Bank, meanwhile, has raised its forecasts to 6.5 per cent for 2017 and 6.7 per cent for 2018.

Last week, local lender Metropolitan Bank & Trust Co. trimmed its 2017 Philippine growth forecast to 6.6 per cent from the previous projection of above 7 per cent. Credit Suisse is now estimating growth of 6 per cent after 6.4 per cent previously.

Overall, the economy of the Philippines is the world’s 34th largest economy by nominal GDP according to the 2017 International Monetary Fund’s statistics, and it is the 13th largest economy in Asia.

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Citigroup in a new country study said it expects the Philippines to enjoy the fastest economic growth in Southeast Asia and the third-fastest growth in the entire Asia-Pacific region in the second half, mainly because of higher tech exports. According to Johanna Chua, managing director and head of Asia Pacific Economic and Market Analysis at Citigroup, the Philippines is likely to reach GDP growth of 6.5 per cent in the second half, more than any other Southeast Asian country and just trailing India with 7.5 per cent and China with 6.8 per cent expected growth rates. In comparison, Vietnam is...

Reading Time: 2 minutes

Citigroup in a new country study said it expects the Philippines to enjoy the fastest economic growth in Southeast Asia and the third-fastest growth in the entire Asia-Pacific region in the second half, mainly because of higher tech exports.

According to Johanna Chua, managing director and head of Asia Pacific Economic and Market Analysis at Citigroup, the Philippines is likely to reach GDP growth of 6.5 per cent in the second half, more than any other Southeast Asian country and just trailing India with 7.5 per cent and China with 6.8 per cent expected growth rates.

In comparison, Vietnam is expected to register GDP growth of 6.4 per cent, Indonesia 5.3 per cent, Malaysia 5.2 per cent, Sri Lanka 4.4 per cent, Thailand 3.5 per cent, Hong Kong three per cent, Korea 2.9 per cent, Mongolia 2.6 per cent, Singapore 2.5 per cent Taiwan 2.3 per cent, Citigroup anticipations show.

However, the bank’s 2017 forecast — which is within the Philippine government’s 6.5-7.5 percent target — represents a slowdown from the actual GDP growth of 6.9 per cent in 2016, but is still substantial. This also corresponds with a recent forecast by Standard Chartered.

This year’s growth in the Philippines is underpinned by higher technology exports, mainly computer chips, and steady remittances from overseas workers, but also to some extent helped by the government’s tax reforms and infrastructure investment.

Other institutions are also cautiously optimistic about the Philippine growth potential.

The International Monetary Fund earlier this week trimmed its 2017 Philippine growth forecast to 6.6 per cent from 6.8 per cent but said the country maintained a stable economy amid global uncertainties. The World Bank’s 2017 forecast is also a lower 6.8 per cent, from 6.9 per cent previously.

The Asian Development Bank, meanwhile, has raised its forecasts to 6.5 per cent for 2017 and 6.7 per cent for 2018.

Last week, local lender Metropolitan Bank & Trust Co. trimmed its 2017 Philippine growth forecast to 6.6 per cent from the previous projection of above 7 per cent. Credit Suisse is now estimating growth of 6 per cent after 6.4 per cent previously.

Overall, the economy of the Philippines is the world’s 34th largest economy by nominal GDP according to the 2017 International Monetary Fund’s statistics, and it is the 13th largest economy in Asia.

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