Stronger GDP growth seen in next 2 years

MANILA, Philippines — Maybank Kim Eng expects a six percent economic growth for the Philippine economy over the next two years after slowing to an eight-year low and falling below six percent last year.

Suhaimi Ilias, chief economist of Maybank Kim Eng, said in a press conference the country’s gross domestic product (GDP) growth would pick up to 6.3 percent this year and 6.5 percent next year.

The country’s GDP expansion picked up to 6.4 percent in the fourth quarter from the revised six percent in the third quarter due to the catch up in government spending.

For this year, Ilias said private consumption is expected to grow by 6.2 percent from 5.8 percent, while government consumption is seen to rebound to 11.9 percent after slowing to 10.5 percent last year.

Likewise, Ilias said gross fixed capital formation would jump to 11.2 percent from 1.5 percent.

“There could be upside to our 2020 real GDP growth forecast of 6.3 percent as the unutilized spending allocation from the delayed budget in 2019 is allowed by law to be utilized until end 2020,” Ilias said.

In terms of trade, exports are expected to increase faster at 4.4 percent this year from 3.2 percent last year, while imports would rise by 7.6 percent from 2.1 percent.

On the other hand, Ilias pointed out inflation would accelerate to three percent for 2020 and 2021 after easing to 2.5 percent last year from 5.2 percent in 2018 resulting to further easing by the Bangko Sentral ng Pilipinas (BSP).