S&P: PHL to see fastest growth in Asean

By Bianca Cuaresma – NOVEMBER 29, 2016, Businessmirror

International credit watcher Standard & Poor’s Global Ratings (S&P) retained its 6.5-percent full-year growth forecast for the Philippines despite the economy’s better-than-expected performance in the January-to-September period that saw the GDP expansion averaging 7 percent.

Nonetheless, S&P said in its Asia-Pacific Credit Outlook 2017 the Philippines will continue to outpace the growth of its Southeast Asian neighbors this year.

The 6.5-percent forecast is the fastest among the rated Asean countries and one of the fastest in Asia Pacific, next only to S&P’s 8-percent forecast for India and 6.6 percent for China.

“The Southeast Asian economies are seeing stable growth, with the Philippines outperforming the region,” S&P said. The report did not say if the third-quarter economic performance has been factored in.

The international credit watcher attributed its positive outlook for the Philippines to its growing middle class, business-process outsourcing boom and expansionary fiscal policy with emphasis on public infrastructure.

Across Asia Pacific, meanwhile, S&P noted the region’s economic growth appears to be steady, amid uncertainty over the policies of the incoming Trump administration, a sentiment dominating financial markets worldwide.

Just this week, the International Monetary Fund (IMF) said it is looking to revise upward its growth forecasts anew for this year, as the third quarter growth outcome went above its expectations.
IMF Resident Representative to the Philippines Shanaka Jayanath Peiris said the Philippines could grow stronger than their earlier 6.4-percent full-year growth forecast, which was already upgraded from 6 percent just this late-September.

“The third quarter GDP outturn in the Philippines led by a recovery in agriculture and continued strength of private consumption and gross investment, was faster than anticipated than in our 6.4-percent growth forecast for 2016,” Peiris said.

Several international economists have already upped their forecast for the Philippine economic growth just last week, cementing the country’s path as a fast-growing economy, amid socio-political friction in and out of the Philippines.

In particular, Japan-based Nomura Group Research, HSBC and Barclays Capital Inc. all made upward revisions to their views of the local economy following the announcement of the 7.1-percent Philippine growth rate in the third quarter of the year.

Nomura now has the highest forecast among the three, with a projected expansion of Philippine growth to reach 6.9 percent, from its earlier forecast of 6.7 percent.

Barclays, meanwhile, now put Philippine growth hitting 6.8 percent from the earlier 6.6-percent forecast for 2016 on the back of an accommodative monetary-policy stance and an expansionary fiscal stance.

HSBC upgraded its view of the Philippine economy from 6.5 percent to 6.8 percent for this year and expects 6.5 percent for both 2017 and 2018.