MANILA, Philippines - The Philippine economy is seen to expand at a much faster pace of 7.5 to eight percent this year to be supported by higher infrastructure spending and robust consumption.
“We expect the economy to grow by 7.5 to eight percent this year,†First Metro Investment Corp. president Roberto Juanchito Dispo said during the Philippine Chamber of Commerce and Industry’s General Membership Meeting yesterday.
The economy expanded 6.5 percent in the fourth quarter which brought full-year gross domestic product (GDP) growth to 7.2 percent in 2013.
Full-year GDP growth last year is much higher than the 6.8 percent in 2012.
Dispo said the government’s allocation of P404 billion for infrastructure spending this year, up 37 percent from last year, is seen to boost the business environment and improve the country’s competitiveness.
Following the damage brought by Super Typhoon Yolanda to parts of the country last year, rehabilitation works are estimated to cost P361 billion, which will likewise support economic activity.
Dispo said the government’s flagship Public Private Partnership program, which is seen to accelerate, would likewise support the economy.
Aside from higher infrastructure spending, he said robust consumption amid rising consumer confidence, increasing tourist arrivals as well as resilient overseas Filipino workers remittance flows and growth in business process outsourcing employment, would also drive the economy to accelerate this year.
“By and large, the Philippines continues to be attractive because of sound macroeconomic fundamentals but there are risks,†he said.
The underdeveloped infrastructure, he cited, heightens the country’s vulnerability to calamity.
The power shortage and high electricity costs are likewise seen as risks, and are among the concerns of investors.
Dispo said the local currency is also a risk, and finding a balance will be needed to ensure that all sectors benefit.
“Ideally, it should hover at P44 to P45 for the balance to benefit the economy,†he said.
In the same event, International Business research director Dan Steinbock said the prospects are bright for Asia as well as the Philippines.