UK think tank sceptical over Philippine growth

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The Asia Foundation PhilippinesThe Institute of Chartered Accountants in England and Wales (ICAEW), a renowned think tank, said in its new report Economic Insight: South East Asia that the Philippine economy would grow slower at 5.3 per cent in 2013 from 6.8 per cent in 2012 on the back on a tighter US monetary policy despite strong domestic consumption and government spending.

The government’s own forecast is, however, that the country’s GDP growth will breach 7 per cent in 2013.

For the ICAEW, in 2014, growth in the Philippines is expected to reach 5.4 per cent as public infrastructure would drive the economy. But higher unemployment and poverty levels and a requirement to lift interest rates will drag growth rates back down to 4.6 percent in 2015.

“Increased yields in the US, following the market pricing in the Federal Reserve’s tighter stance, may well mean reduced capital flows to ASEAN,” ICAEW said.

“Both companies and individuals in Philippines and the region have benefited from low interest rates, which have fueled consumption and borrowing against future income,” ICAEW economic adviser Charles Davis said.

“We are likely to see this gradually change as the US economy recovers and the Fed looks for an exit strategy from its very loose monetary policy stance,” he said.

However, so far the indicators look good for the nation. The Philippines again posted a sound GDP growth in the second quarter of 2013, with the country’s economy expanding 7.5 per cent, on par with China.

In the first quarter of the year, growth stood at 7.7 per cent. The country outperformed all its Southeast Asian peers, Indonesia grew by 5.8 per cent, Thailand by 2.8 per cent, Vietnam by 5 per cent, Singapore by 3.8 per cent and Malaysia, by 4.3 per cent.

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Reading Time: 1 minute

The Institute of Chartered Accountants in England and Wales (ICAEW), a renowned think tank, said in its new report Economic Insight: South East Asia that the Philippine economy would grow slower at 5.3 per cent in 2013 from 6.8 per cent in 2012 on the back on a tighter US monetary policy despite strong domestic consumption and government spending.

Reading Time: 1 minute

The Asia Foundation PhilippinesThe Institute of Chartered Accountants in England and Wales (ICAEW), a renowned think tank, said in its new report Economic Insight: South East Asia that the Philippine economy would grow slower at 5.3 per cent in 2013 from 6.8 per cent in 2012 on the back on a tighter US monetary policy despite strong domestic consumption and government spending.

The government’s own forecast is, however, that the country’s GDP growth will breach 7 per cent in 2013.

For the ICAEW, in 2014, growth in the Philippines is expected to reach 5.4 per cent as public infrastructure would drive the economy. But higher unemployment and poverty levels and a requirement to lift interest rates will drag growth rates back down to 4.6 percent in 2015.

“Increased yields in the US, following the market pricing in the Federal Reserve’s tighter stance, may well mean reduced capital flows to ASEAN,” ICAEW said.

“Both companies and individuals in Philippines and the region have benefited from low interest rates, which have fueled consumption and borrowing against future income,” ICAEW economic adviser Charles Davis said.

“We are likely to see this gradually change as the US economy recovers and the Fed looks for an exit strategy from its very loose monetary policy stance,” he said.

However, so far the indicators look good for the nation. The Philippines again posted a sound GDP growth in the second quarter of 2013, with the country’s economy expanding 7.5 per cent, on par with China.

In the first quarter of the year, growth stood at 7.7 per cent. The country outperformed all its Southeast Asian peers, Indonesia grew by 5.8 per cent, Thailand by 2.8 per cent, Vietnam by 5 per cent, Singapore by 3.8 per cent and Malaysia, by 4.3 per cent.

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