IMF keeps Philippine growth forecast; DBS trims outlook

THE INTERNATIONAL Monetary Fund (IMF) has maintained its 2011 Philippine growth outlook of 5% but the risk that this could be missed has increased, a senior official said.

“The staff’s growth outlook for the Philippines for 2011 is unchanged at 5%,” IMF Resident Representative Dennis Botman told BusinessWorld in a e-mail when asked if estimates for the country had been trimmed following last month’s release of a reduced global forecast.

“Downside risks have, however, intensified as the global recovery remains fragile,” Mr. Botman added.

Some analysts, meanwhile, expect a further easing in Philippine growth this year.

Singapore-based DBS Bank, in a June 24 research note, said it had cut its 2011 growth forecast to 4.8% from 5.5% due to slower first quarter growth and softer global economic expansion.

“With the global economy currently running into a soft patch, it is inevitable that the twin growth drivers of the Philippine economy — private consumption and exports — will take a hit,” the bank said.

DBS, however, maintained its forecast that growth would accelerate to 5.2% in 2012, while the IMF has said it would likely stay at 5%.

The IMF, in a June 17 update of its World Economic Outlook, said the global economy would likely expand by a slower 4.3% this year, down from an earlier forecast of 4.4% and lower than 2010’s 5.1% expansion.

It maintained a collective outlook of 5.4% for the ASEAN-5 grouping that includes the Philippines but did not specify country-specific estimates.

In an April report, the IMF had said the Philippines would likely see growth slow to a “modest” 5% this year, below the government’s 7-8% “fighting target” and 2010’s actual growth of 7.6%.

The IMF’s forecast is in line with those of the Asian Development Bank and the World Bank. In trimming the global growth outlook, the IMF said “The global expansion remains unbalanced.”

Factors said to have had an impact included March’s deadly earthquake and tsunami in Japan, and disappointing growth in the United States.