MANILA, Philippines - ING Bank, Standard Chartered Bank, and ANZ Bank see the country’s economic growth picking up and exceeding six percent in the second half on the back of higher government spending.
Joey Cuyegkeng, senior economist at ING Bank Manila, said the gross domestic product (GDP) growth of the Philippines would accelerate to 6.3 percent in the second half from 5.3 percent in the first half.
“We expect economic activity to remain favorable and we forecast a second half GDP growth of 6.3 percent,” he said.
He pointed out government spending jumped 93 percent in July and rose by 29 percent in August.
“Government infrastructure spending in July and August is quite strong,” Cuyegkeng added.
Weak global demand and lack of government spending pulled down the GDP growth to 5.3 percent in the first half from 6.4 percent in the same period last year.
The economist also explained that strong imports in July also reflect strong domestic demand in the country.
He said higher domestic liquidity and increasing bank lending point to the improving economic growth.
Standard Chartered Bank regional economist for Asia Jeff Ng said the country’s GDP growth is likely to settle at six percent this year from 6.1 percent last year.
“We expect GDP growth at six percent in the second half from 5.3 percent in the first half,” he said.
Ng explained raw material imports jumped 41.2 percent, while consumer good imports rose 19 percent in August despite the slowdown in import growth to 4.1 percent in August from 23 percent in July.
“We expect the solid raw material imports to translate into some improvement in export growth in the coming months. At the same time, consumer goods imports imply that domestic consumption likely remain resilient. This will remain an anchor for growth,” he said.