IN line with the position taken by debt watchers and private analysts, the International Monetary Fund (IMF) has reduced its Philippine economic growth outlook for this year.
From a previous forecast of 6.7 percent, the Washington-based lender cut the 2015 growth outlook in gross domestic product (GDP) to 6.2 percent
The IMF’s latest outlook is still higher than the 6.1 percent expansion in Philippine output last year, but below the 7 percent to 8 percent growth assumption by the government.
“Real GDP is projected to grow by 6.2 percent in 2015 as lower commodity prices lift household consumption and improved budget execution raises public spending, though slightly lower than expected previously due to weaker global growth and a fiscal deficit below targeted,” Shanaka Jayanath Peiris, IMF resident representative to the Philippines, said in an e-mail to reporters on Thursday
Putting a drag on overall growth is the slower-than expected 5.2 percent expansion in the first quarter of 2015, the lender added.
“The first quarter 2015 slowdown was due mainly to temporary factors, including the effects of dry weather on agricultural production, weak global demand, and slow budget execution,” Peiris said.
Still, IMF noted a silver lining in Philippine output from fiscal spending—which is expected to accelerate to 2 percent of GDP in 2016—in line with expectations of a 6.5 percent growth potential.
Debt-watcher Standard and Poor’s Ratings Services had also lowered its 2015 forecast for Philippine output to 6 percent from 6.2 percent.
Moody’s Investors Service also trimmed its 2015 growth forecast to 6 percent from 6.5 percent, citing bottlenecks in the deficit spending.
Singapore-based DBS Bank and SB Equities Inc., the equities brokerage arm of Security Bank Corp., as well as Standard Chartered Bank are also of the opinion that the Philippines is headed for a slowdown this year.