The Research Department of the Metropolitan Bank and Trust Co. (Metrobank) has revised its growth forecast for full-year 2012 Philippine gross domestic product (GDP) to 6.6 percent, citing the stellar growth of the economy in the first three quarters of the year.

In its latest report entitled The Economic Weather Report 1Q 2013 Outlook and Forecasts, the bank said that the country’s economy seems to be on the road to a higher growth trajectory, surprising markets with remarkable expansions in the first three quarters of the year.

The country’s economy posted a third quarter GDP growth of 7.1 percent, 6 percent in the second quarter and 5.9 percent in the first quarter.

It averaged to 6.5 percent and is one of the highest among Association of Southeast Asian Nations economies, including China.

“The economy is thus seen to cap 2012 way stronger than what was previously expected,” the report said, adding that the strong growth for the last three quarters surprised global markets that the country has now become the new darling of global investors.

On the demand side, it noted that household consumption will remain the growth driver, while consumer spending will still be supported by the sustained inflow of remittances and the still well-anchored inflation expectations.

“Government spending will also support GDP growth amid the expected boost from midterm election spending,” the report added.

On the supply side, it mentioned that the services sector will be supported by the rosy outlook for the real estate and tourism sub-sectors.

Public construction is expected to sustain its growth in the second half of the year on accelerated government spending ahead of the congressional elections next year, while the agricultural sector is seen to remain resilient even with the damage caused by Typhoon Pablo in the latter part of 2012, the report said.

For 2013, it added that economic prospects appear bright for the reawakened “Asian Tiger,” as it projected a 6-percent GDP growth for this year.

The report explained that the growth will be supported by solid consumption spending, higher government spending, and favorable outlook for the real estate and tourism sub-sectors.

Meanwhile, the report warned that the global economy faces an uncertain horizon in 2013, as economic events in the past year proved to be gloomy.

“The spillover effects of the dragging saga of the eurozone crisis are expected to persist this year as current policy stances continue to fall short of what is needed to prevent further weakening of economies,” it observed.

It also said that that the US is also seen to post sluggish growth as structural weaknesses are still left unaddressed. However, emerging economies will remain the bright spots of growth opportunities.

DTI forecast
Meanwhile, the Department of Trade and Industry (DTI) also forecasts a 6-percent GDP growth for 2012, and vowed to support inclusive economic growth through robust investment promotion and assistance to micro-, small- and medium-entrepreneurs (MSMEs).

“The 2012’s GDP growth can be attributed to the increased confidence of foreign investors in the country, the administration’s good governance initiatives, and improved tax collection,” said Trade and Industry Secretary Gregory Domingo.

He said that economic growth in 2012 can be sustained in the following years based on the influx of foreign investors, improved consumer spending and increased export activities. Domingo added that there is growth in the country’s major sectors such as manufacturing, services and agriculture.

According to latest government data, services sector grew by 7 percent in the first three quarters of 2012, agriculture up by 4.1 percent and the manufacturing sector at 3.9 percent.

 He said that there are also priority programs that are geared towards developing MSMEs, such as the P700-million Shared Services Facilities Project. Under the project, about 1,000 pieces of equipment will be granted to industry clusters, cooperatives, and local government units nationwide to enhance the production capabilities of MSMEs.

 The DTI will push for the development of the tourism and agriculture sectors, which are mostly made up of MSMEs that could attract more investments and create jobs in the
countryside.

With report from Rosalie C. Periabras