PH expected to grow fastest in Asean

The Philippines will post the fastest growth among the five largest economies of the Association of Southeast Asian Nations over the next two years, the International Monetary Fund said Monday.

The IMF said in its latest regional economic outlook the Philippines was expected to grow 6.5 percent in 2014 and 2015, faster than the growth of other members of Asean 5, such as Indonesia, Malaysia, Singapore and Thailand.

It said Indonesia was expected to grow 5.4 percent in 2014 and 5.8 percent in 2015; Malaysia, 5.2 percent and 5 percent; Singapore, 3.6 percent and 3.6 percent; and Thailand, 2.5 percent and 3.8 percent.

“Official goals of rapid and inclusive growth will likely provide a boost to growth as infrastructure spending is ramped up in a context where the near-term fiscal deficit target remains manageable,” the IMF said.

The Philippine economy expanded 7.2 percent in 2013, the highest among Asean-5 nations. It was higher than Indonesia’s 5.8 percent, Malaysia’s 4.7 percent, Singapore’s 4.1 percent and Thailand’s 2.9 percent.

The IMF, however, said the supply constraints caused by typhoon Yolanda in November did not affect the growth prospects of the Philippines, although food price pressures had created risks to monetary policy, and the peso depreciation could also impact core inflation.

It said with the exception of the Philippines where growth picked up, Asean growth slowed most recently on account of cyclical factors.

“These have been mostly domestic, but external factors have also played an important role. Going forward, the anticipated upturn in global demand conditions should become more of a supportive factor, particularly in Malaysia and Singapore,” it said.

IMF mission chief Rachel van Elkan told reporters in a previous briefing the Philippine economy was well positioned to absorb a gradual tightening of US financial conditions.

She said the challenge was to continue implementing policies that would deliver high-quality and sustainable growth.

Elkan said further reforms were needed to create a more enabling business environment and to generate additional employment. –Julito G. Rada, Manila Standard Today