PH growth seen fastest in Asean

The Philippines will remain the fastest growing economy in Southeast Asia this year, despite the slower-than-expected expansion in the first half, British bank Barclays said in a report over the weekend.

Barclays said the Philippines was expected to achieve a full-year growth of 5.5 percent in 2015, down from its previous forecast of 6.5 percent after data showed that actual growth in the first half reached only 5.3 percent.

The government announced last week the gross domestic product of the Philippines grew 5.6 percent, bringing to 5.3 percent the first-half average, below the government’s target of 7 percent to 8 percent.

“Overall, despite the cut in our growth forecast, we expect the Philippines to continue to outperform the other Asean economies, with the country set to be the fastest-growing economy among the major Asean economies for a third consecutive year in 2015,” Barclays said.

It said as a proof of its continuous belief on the strong potential of the Philippine economy, the bank retained its 2016 growth forecast at 6 percent.

Economic growth recovered in the second quarter, posting a 5.6-percent expansion, higher than the revised 5 percent a quarter ago.

However, the second-quarter number was significantly slower than the 6.4 percent growth in the second quarter a year ago.

GDP grew 6.1 percent in 2014.

Barclays said while Bangko Sentral ng Pilipinas continued to sound cautious on rising market volatility, the bank regulator would not “deliver any policy easing, as domestic activity remains resilient despite poor external conditions.”

“We recently pushed back our rate hike forecast to the third quarter of 2016, which would be after the presidential election in May 2016,” Barclays said.

Bangko Sentral Governor Amando Tetangco Jr. earlier said there was no need to tweak the current monetary policy settings especially after the economy expanded 5.6 percent in the second quarter.

Tetangco said the higher second-quarter GDP number relative to the first quarter was supported by solid domestic aggregate demand, particularly consumption and capital formation.

“With this outturn, there may be no need for any immediate recalibration of monetary policy settings,” Tetangco said.

Tetangco said Bangko Sentral would continue to coordinate with other agencies of the government on the assessment of El Niño dry spell and its potential impact on output and prices of vital goods and services . –Julito G. Rada, Manila Standard Today