MANILA, Philippines – Local think tank Global Source Partners (GSP) cut its growth forecasts for the Philippine economy this year and next year due to the slower growth in the second quarter.
In a report released a day after the government announced its latest economic numbers, GSP said the quarter-on-quarter growth of the economy, which slowed to 0.2% in the second quarter from 3% in the first, was a telling sign that the growth momentum of the Philippines was slowing.
“All in all, despite slowing momentum, domestic demand seems strong enough to bring full-year growth to above 5% this year — likely closer to 5.5% in our estimate. Given the still negative outlook on global growth next year, we lower our forecast for 2013 from 5.5% to 5%, which is still an optimistic forecast that partly depends on elections and related public spending helping to drive growth,” GSP said.
However, GSP said their growth outlook was still positive, given the strong domestic demand, which was evident in the first two quarters of the year, and the election spending expected for next year.
Philippine gross domestic product grew by 5.9% in the second quarter, slower than the revised 6.3% growth in the first, but still higher than analysts’ and even government’s expectations, which averaged 5.4%.
Sustaining growth
GSP said in the short term, the Philippine economy should find some boost from the country’s business process outsourcing (BPO) companies, which have proven to be resilient to global crises.
On the supply side, GSP said real estate, renting and business activities, which also include BPO services, is expected to register robust growth.
One of the main growth drags would be electronic exports due to the grim outlook on the global economy. This has already become clear in recent months since exports of electronics and semiconductor firms continued to decline. –CAI ORDINARIO, Rappler.com
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