MANILA, Philippines - HSBC Philippines is projecting the economy to grow by 5.1 percent this year.
It is slightly higher than an earlier forecast made by Frederick Neumann, HSBC chief economist. He reported last month that the Philippine economy would expand by 4.3 percent this year and 4.6 percent in 2011.
“In the Philippines, a national election period tends to add a one-percentage point growth to the economy due to an unusual high level of economic activity from election spending,” Roland Gerard R. Veloso Jr., HSBC Philippines senior vice president and head of corporate banking division, explained.
Veloso said their optimism also stems from a consistent growth pattern in remittances from overseas Filipinos and the services sector, especially the business process outsourcing (BPO) industry.
Remittances expanded by 5.1 percent to $15.8 billion in the period January to November 2009. In November alone, inflows grew by an outstanding $1.5 billion or 11.3 percent better than the same month in 2008.
Money transfers from overseas Filipinos are forecast to reach an all-time high of $17 billion, from $16.4 billion in 2008.
Veloso said remittances are forecast to expand by another six to 10 percent this year owing to double-digit growths in deployments in the Middle East.
“The BPO sector has not only grown in numbers but also in quality expanding to more complex forms of outsourcing services. Externally, the Asia Pacific region has been tagged as the ‘pied piper’ of global economic growth, HSBC said in a report.
HSBC’s emerging market index (EMI) grew to 56.1 percent in the last quarter of 2009, said to be a two-year high.
“The index confirms emerging markets as leading global economic recovery,” the report said. Curiously, the Philippines was not included in the EMI.
HSBC chief economist Stephen King said all data point to the emerging market as leading the global economy.
“Drivers of the global economy continue to shift to the East, and we are seeing emerging nations becoming increasingly dependent on each other rather than on the economies of developing countries,” King said in report.
At the center of the emerging markets is China, which serves as a trade center, a major exporter, and a major consumer.
Its broad-based economic gains are stimulating activity in the emerging markets, which in turn, is driving a sustained global recovery.
Another major player among the emerging market players is Indonesia which grew by 6.1 in 2008 and is expected to expand by 4.3 percent in 2009, and march forward by 5.8 percent this year.