Standard & Poor’s on Tuesday raised its Philippine economic forecast for the year but cut its growth projection for Asia-Pacific as a whole and citing the impact of a slowing growth in China, the world’s second largest economy.
In its report “Credit Conditions: Increased China Downside Risk Dampens Asia’s Growth,” the debt-watcher revised its 2013 gross domestic product (GDP) growth outlook for the Philippines to 6.9 percent from 6.5 percent in May.
“The more domestically-led ASEAN economies, headed by the Philippines and Indonesia, continue to outperform the more trade-dependent newly industrialized economies,” the report read.
The revised projection now falls within the Philippine government’s 6 to 7 percent goal this year and is slightly higher than last year’s 6.8 percent.
The debt-watcher, however, trimmed its 2014 economic forecast for the Philippines to 6.1 percent from 6.3 percent.
S&P sees ASEAN economies growing 5.5 percent this year before accelerating to 5.6 percent next year.
“The ASEAN sub-region will continue to be the bright spot in Asia-Pacific, owing to the larger contribution of domestic demand to growth in these economies,” the report read.
The debt-watcher noted the downward revision for its Asia-Pacific forecast was largely prompted by cuts made in China’s economic forecast.
“We now see real GDP growth in Asia-Pacific at 5.3 percent this year, down slightly from our 5.5 percent forecast in May,” the report read.
S&P sees Asia-Pacific growth accelerating to 5.6 percent next year.
“Growth in Asia-Pacific came in weaker than expected in the first half of 2013 undercut by sluggish external demand and internal growth drivers,” the report read, adding that the “main risk factor for the region is a continued slowdown in China.”
China’s growth is forecast at 7.3 percent this year and the next, slower than the 7.5 percent target of the world’s second largest economy.
In an interview with reporters Monday, Socioeconomic Planning Secretary Arsenio Balisacan noted the economy will remain robust this year on domestic demand and a continued uptick in manufacturing and investments.
Philippine output expanded by 7.8 percent in the first quarter, the fastest in Asia, on the back of strong domestic demand and rising investments. — VS, GMA News
Invoke Article 33 of the ILO constitution
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