Think tanks, banks upgrade Phl growth forecast

MANILA, Philippines - Investment banks and think tanks upgraded their economic growth forecasts for the Philippines after it posted a stronger-than-expected gross domestic product (GDP) growth of 6.4 percent in the first quarter of the year.

New York-based think tank Global Source Partners upgraded the country’s GDP growth forecast to five percent instead of 4.5 percent this year after the domestic output expanded by 6.4 percent in the first quarter.

“Hence, we conservatively tweak our growth projection for 2012, from 4.5 percent to five percent, leaving the GDP forecast for 2013 unchanged at 5.5 percent,” former Finance undersecretary Romeo Bernardo and economist Margarita Gonzales said.

Bernardo and Gonzales stated in a market brief on the Philippines entitled “So Far, Really Good” that the strong GDP numbers in the first quarter would likely fuel the optimism we have noted in the business sector since the beginning of the year.

“Proof of robust domestic demand could certainly help counter some of the worries about a darkening outlook for the global economy, especially with continued financial turbulence coming from the euro zone and certain recession in a number of European economies,” they said.

For 2013, Global Source decided to retain the revised GDP growth forecast at 5.5 percent.

Japanese-owned Nomura International (HK) Ltd said in its Daily Research Summary that it is now looking at a higher GDP growth of 5.1 percent instead of 4.6 percent this year.

Nomura said the 6.4 percent GDP growth in the first quarter of the year from the revised four percent in the fourth quarter of last year was fuelled by strong public sector spending and still-robust private consumption.

“We upgrade our 2012 GDP growth forecast to 5.1 percent from 4.6 percent as we believe these drivers will not only persist, but will also be augmented by faster increases in private investment owing to on-going reforms,” Nomura said.

For her part, London-based Barclays Capital Ltd economist Prakriti Sofat said the investment bank has raised the country’s GDP growth forecast to 5.5 percent instead of 4.2 percent this year

“Philippines GDP expanded by 6.4 percent year-on-year in the first quarter, much stronger than expected and compared with an upwardly revised four percent in the fourth quarter,” Sofat said.

The National Statistical Coordination Board (NSCB) reported that the country’s GDP grew by 6.4 percent in the first quarter from the revised four percent in the fourth quarter of last year.

The strong growth in the first quarter of the year was attributed to robust domestic demand, rebound in exports, and higher government spending.

The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP growing at a faster rate of five percent to six percent after slackening to four percent last year from 7.6 percent in 2010 due to weak global demand and cautious spending by the Aquino administration.