Philippines growing faster than expected

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The Philippine economy is expected to grow by more than 6 per cent this year, which is above the country’s earlier growth forecast of 5 per cent.

According to Economic Planning Secretary Arsenio Balisacan, the growth of country’s GDP will exceed its high-end target of 6 per cent, adding that growth in 2013 would be between 5.5 to 6.5 per cent and between 6.5 to 7.5 per cent in 2014 and beyond.

Similarly, the World Bank has raised its growth forecast for the Philippines for 2012 to 6 per cent, crediting prudent economic policies of the administration of President Benigno Aquino coupled with political stability in the country.

“Consumption, which accounts for 75 per cent of the Philippines’ GDP, is expected to drive overall growth underpinned by continued growth in remittances and higher government spending with the national elections next year,” the World Bank said. It added that in 2013, the Philippines could grow by 6.2 per cent.

Credit rating up

Rating agency Standard & Poor’s has recently upgraded its outlook on the credit rating of the Philippines from “stable” to “positive”, prompting confidence that the country will finally get an investment grade in 2013. Moody’s also has issued an upgrade appraisal for the Philippines on the back of the country’s strong economic fundamentals as reported by Inside Investor.

Another positive economic indicator is the rising value of remittances from overseas Filipino workers. Remittances reached a record high in October 2012 as global demand for Filipino workers remained strong despite the lingering crisis in the US and Europe.

Filipino overseas workers sent home $1.93 billion in cash in October 2012, the highest monthly figure so far on record, rising by 8.5 per cent from October 2011, according to Philippine central bank.  This brought total remittances in the first 10 months of 2012 to $17.5 billion, up by 5.8 per cent from the same period a year ago.

FDI drops

However, foreign investment remains sluggish. The Philippines suffered a big drop in foreign direct investment (FDI) in September in what officials claimed was due to global economic problems.The central bank reported on December 11 that the net inflow of FDI amounted to only $55 million in September 2012, down 60 per cent compared to the same month in 2011.

The decline was attributed to lingering issues adversely affecting the business climate in the country. Economists said a growing economy alone would not be sufficient to generate a higher amount of FDI, noting the need for efforts to solve structural issues that discouraged more foreigners from doing business in the country.

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Reading Time: 2 minutes

The Philippine economy is expected to grow by more than 6 per cent this year, which is above the country’s earlier growth forecast of 5 per cent.

Reading Time: 2 minutes

The Philippine economy is expected to grow by more than 6 per cent this year, which is above the country’s earlier growth forecast of 5 per cent.

According to Economic Planning Secretary Arsenio Balisacan, the growth of country’s GDP will exceed its high-end target of 6 per cent, adding that growth in 2013 would be between 5.5 to 6.5 per cent and between 6.5 to 7.5 per cent in 2014 and beyond.

Similarly, the World Bank has raised its growth forecast for the Philippines for 2012 to 6 per cent, crediting prudent economic policies of the administration of President Benigno Aquino coupled with political stability in the country.

“Consumption, which accounts for 75 per cent of the Philippines’ GDP, is expected to drive overall growth underpinned by continued growth in remittances and higher government spending with the national elections next year,” the World Bank said. It added that in 2013, the Philippines could grow by 6.2 per cent.

Credit rating up

Rating agency Standard & Poor’s has recently upgraded its outlook on the credit rating of the Philippines from “stable” to “positive”, prompting confidence that the country will finally get an investment grade in 2013. Moody’s also has issued an upgrade appraisal for the Philippines on the back of the country’s strong economic fundamentals as reported by Inside Investor.

Another positive economic indicator is the rising value of remittances from overseas Filipino workers. Remittances reached a record high in October 2012 as global demand for Filipino workers remained strong despite the lingering crisis in the US and Europe.

Filipino overseas workers sent home $1.93 billion in cash in October 2012, the highest monthly figure so far on record, rising by 8.5 per cent from October 2011, according to Philippine central bank.  This brought total remittances in the first 10 months of 2012 to $17.5 billion, up by 5.8 per cent from the same period a year ago.

FDI drops

However, foreign investment remains sluggish. The Philippines suffered a big drop in foreign direct investment (FDI) in September in what officials claimed was due to global economic problems.The central bank reported on December 11 that the net inflow of FDI amounted to only $55 million in September 2012, down 60 per cent compared to the same month in 2011.

The decline was attributed to lingering issues adversely affecting the business climate in the country. Economists said a growing economy alone would not be sufficient to generate a higher amount of FDI, noting the need for efforts to solve structural issues that discouraged more foreigners from doing business in the country.

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