Philippine 2013 GDP forecast raised again

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filipinosEconomic analysts are forecasting a standout year for the Philippines, already home to one of the fasting growing stock markets in the world whose currency, the peso, recently hit a 58-month high against the greenback, closing at 40.86 pesos to the dollar on January 8.

According to economist Victor A. Abola of the University of Asia and the Pacific (UA&P), a private research center in the Philippines, GDP growth could hit 7.5 to 8 per cent this year, surpassing the government’s target of 6.5 to 7 per cent and the slightly less bullish sentiments of the World Bank of 6.2 per cent.

Analysts point to the agricultural sector as having high potential in 2013 due to increased government spending to construct more irrigation systems, farm-to-market roads and storage facilities.

Philippines economic growth will also receive a boost from stoked spending on infrastructure projects, largest revenues from the consumer and service sectors and election spending, predicts First Metro Investment Corp (FMIC), an investment bank.

Reliance on remittances will begin to slide, the bank also believes, while remaining a key source of growth. As of October 2012, remittances from overseas workers grew by 5.84 per cent to $17.5 billion. The Bangko Sentral ng Pilipinas (BSP) expects remittances to keep on this positive trajectory in 2013 by growing 5 per cent.

Meanwhile, inflation has remained benign ending at 3.2 per cent in 2012, with the UA&P predicting lower inflation if food and oil prices remain controlled.

FMIC has also maintained a positive outlook on the equity market, expecting corporate earnings on the Philippine Stock Exchange to grow by 20 per cent.

However, the strong peso poses a threat to export oriented manufacturing and service industries, see our earlier story.

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Reading Time: 1 minute

Economic analysts are forecasting a standout year for the Philippines, already home to one of the fasting growing stock markets in the world whose currency, the peso, recently hit a 58-month high against the greenback, closing at 40.86 pesos to the dollar on January 8.

Reading Time: 1 minute

filipinosEconomic analysts are forecasting a standout year for the Philippines, already home to one of the fasting growing stock markets in the world whose currency, the peso, recently hit a 58-month high against the greenback, closing at 40.86 pesos to the dollar on January 8.

According to economist Victor A. Abola of the University of Asia and the Pacific (UA&P), a private research center in the Philippines, GDP growth could hit 7.5 to 8 per cent this year, surpassing the government’s target of 6.5 to 7 per cent and the slightly less bullish sentiments of the World Bank of 6.2 per cent.

Analysts point to the agricultural sector as having high potential in 2013 due to increased government spending to construct more irrigation systems, farm-to-market roads and storage facilities.

Philippines economic growth will also receive a boost from stoked spending on infrastructure projects, largest revenues from the consumer and service sectors and election spending, predicts First Metro Investment Corp (FMIC), an investment bank.

Reliance on remittances will begin to slide, the bank also believes, while remaining a key source of growth. As of October 2012, remittances from overseas workers grew by 5.84 per cent to $17.5 billion. The Bangko Sentral ng Pilipinas (BSP) expects remittances to keep on this positive trajectory in 2013 by growing 5 per cent.

Meanwhile, inflation has remained benign ending at 3.2 per cent in 2012, with the UA&P predicting lower inflation if food and oil prices remain controlled.

FMIC has also maintained a positive outlook on the equity market, expecting corporate earnings on the Philippine Stock Exchange to grow by 20 per cent.

However, the strong peso poses a threat to export oriented manufacturing and service industries, see our earlier story.

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