Investments to propel Philippine economy in 2017

CEBU, Philippines - Investments and private consumption are expected to propel growth in the  Philippine economy this year, analyst said.

Augusto Cosio, president of First Metro Asset Management, said that  investments, among others, are to lead the growth this year.

"These are investments in productive capacity, infrastructure, manufacturing and industry," he told The FREEMAN in a recent interview.

Last year, investments continued to drive economic growth, indicating  growth in both private investments in construction and the strong public infrastructure investment. 

Construction is seen to remain a major contributor to growth due to the strong commitment of the government to implement a massive infrastructure program.

Another indication of the robust domestic demand is the rising imports  which, as of November 2016, grew to US$7.3 billion, up 19.7 percent.

“The surge in trade transactions with East Asia and the ASEAN boosted the  performance of imports, which also signals an increase in the purchasing power of  Filipinos. We expect that this further increased in December 2016,” Economic Planning Chief Ernesto Pernia earlier said.

Cosio also expects foreign direct investments to continue to contribute to growth. 

As of October 2016, FDIs posted a net $342 million for the month, down  27.08 percent from September’s $469 million and 14.29 percent from the year-ago $399 million, data from the Bangko Sentral ng Pilipinas showed.

FDIs are a key source of capital for the economy.

Moreover, Cosio also underscored that strong domestic consumption will continue to be a key growth driver.

Household consumption remains a pillar of strength for the domestic economy.

With upbeat consumer confidence, private consumption grew by 7.3 percent as of the third quarter last year.

The higher private consumption is also supported by stable inflation, low interest rates, better labor market conditions and the steady-though-slower growth in remittances from overseas Filipino workers.

Household consumption comprises around 70 percent of national output.

OFW remittances in the 11 months ending November grew 5.1 percent year on year to $26.9 billion, BSP data showed. (FREEMAN)