BMI Research maintains a constructive view of medium-term economic outlook for the Philippines even if the gross domestic product (GDP) grew at a slower pace of 6.4 percent in the first quarter of 2017 from 6.6 percent a year earlier.
“Despite the growth moderation, we maintain a constructive view of the country’s medium-term economic outlook,” Fitch-owned BMI Research said in an analysis report released on Monday.
“We expect a more multilateral foreign policy stance, the government’s infrastructure overhaul, and an improved business environment to drive growth going forward,” BMI said.
Higher infrastructure and development spending in line with the Philippine Development Plan 2017-2022 poses a positive growth for the country, which should be a real driver of GDP growth in excess of 6.0 percent over the coming years.
Earlier, BMI Research noted political instability may contribute downside risks. US President Donald Trump’s possible move to impose more protectionist measures would also impact the economy and peso negatively.
In a radio interview last week, Budget Secretary Benjamin Diokno said the infrastructure projects lined up will help grow Philippine economy, and that the country will not fall into a debt trap.
He said the debt-to-GDP ratio is at 40%, and is expected to go down to 35 percent in 2022 as the economy grows faster.
Under the Philippine Development Program, the GDP is expected to grow by 7 to 8 percent in the medium-term as a result of strategic infrastructure development, along with ensuring security, public order and safety, attaining just and lasting peace and ensuring ecological integrity and a clean and healthy environment.