Phl growth seen at 'upper' 3%

MANILA, Philippines - British lender Standard Chartered bank (SCB) projects the Philippines’ gross domestic product (GDP) to grow in the “upper three percent” this year, which will be driven by the perceived political stability in the country and increased infrastructure spending.

Amid economic uncertainties in the US and the still ongoing debt crisis in Europe, the Philippines managed to post a GDP growth of 3.7 percent last year, slower than the 7.6 rise in 2010. 

The government expects the GDP to expand by five to six percent this year.

Mahendra Gursahani, chief executive officer and consumer banking head of SCB in the Philippines said that while the Philippines may still be affected by external shocks, growth would still be “in the upward trajectory” if the government can increase the rollout of infrastructure projects and if exports will continue to recover.

“We have a good positive sentiment the people are looking at the Philippines as the country that can fulfill its promise that it held for a long time. External factors can still affect the country but the internal conditions are right: there is political stability, there is propensity for the government to spend and pump prime. The investor interest is there,” he said.

Data from the National Statistics office (NSO) showed that merchandise exports in January rose by three percent to $4.121 billion from $4 billion a year earlier, ending eight months of decline that started in May 2011.

Gursahani also expects inflation to be “manageable” this year and within the central bank’s target of 3.1 percent for 2012.

Latest government data shows that annual headline inflation rate continued to decelerate to 2.6 percent in March from 2.7 percent in February. 

Jaspal Bindra, SCB’s group executive director and chief executive officer for Asia, said the international community generally views the Philippines as a favorable investment destination but said the country needs to be able to institute the right conditions for investors.

“There is a lot of excitement about the Philippines...both in how it fared in the last four to five years and what potential to grow from there, in the foreseeable future. There are not many countries in the world today that can track that kind of positive investment criteria,” he said.

“I think that from the outside it’s one of the countries that we looked at, including Indonesia in a positive way,” headded.

Bindra believes that there is a lot of potential for growth in the infrastructure -as shown in the continued implementation of the government’s Public-Private Partnership (PPP) program-and in the aggressive promotion of local tourism.

“There are so many other areas that the Philippines can develop. We’ve seen exponential increase in the BPO sector. Tourism is now also firmly in the administration’s agenda. Integrated resorts and gaming centers are also something that is being developed right now.

Bindra also noted that the controversial mining sector is a huge growth area.

“The mining sector is untouched. It is a very difficult topic to really understand, because in most countries it occurs in mountains but here it occurs in arable land. It is a very touchy subject but the Philippines is mineral rich and it’s all untapped,” he said.