International bank ING Financial Markets said on Wednesday that the gross domestic product (GDP) growth of the country would be within 6 percent in 2014 and 2015, which is lower than some earlier forecasts.
According to the ING, the country’s economy would be growing 6.7 percent for the year and 6 percent for 2015, compared to 7 percent for 2013 and the previous 7.2-percent forecast for 2014.
The GDP growth under the Aquino administration from 2011 averaged to 6.1 percent, compared to the 2.9 percent to 4.7 percent from former President Corazon Aquino to Gloria Arroyo, now the representative of Pampanga province.
Joey Cuyegkeng, the bank’s Manila director and senior economist, said that the project GDP growth for 2014 and 2015 would be the result of the overall macroeconomic picture where the services and manufacturing sectors will grow, and infrastructure development through public-private partnership (PPP) will be carried out.
Reconstruction in areas hit by Super Typhoon Yolanda will also boost economic growth.
For the negative factors, Cuyegkeng pointed out the rising interest rates and the downgrade of emerging markets.
“Reconstruction effort [in the Visayas]is a high profile move, which indicates that the government is doing their program, and that will eventually result [in]good growth,” the economist added.
He said that if the government pushes reconstruction spending “soon rather than later,” uncertainty toward the Philippine economy will fade and GDP growth will dwell from 6 percent to 6.5 percent.
Cuyegkeng also said that the inflation rate is seen to go up to 4.3 percent for the month—with no change” within the first half of the year—while foreign exchange rates would be P45 to a dollar by the year end.
“The problem is that is the exchange rate would continue to underperform the Asian currencies, then we’ll probably see some central bank action,” Cuyegkeng said, referring to the Bangko Sentral Ng Pilipinas.
“[If it goes beyond P46 a dollar,] it would create a momentum. It’s going to be difficult to control or to stabilize it once the momentum is there,” he said.
For the international markets, a performance that is “good, but not great” is seen, according to ING Chief Asia Economist Tim Condon, same as with the economies of United States, Japan and China.