The economy is likely to expand further this year on the back of strong household spending and investments among other factors, Wallace Business Forum said.
Gross domestic product (GDP) growth is expected to move nearer 7 percent in 2018, slightly better than the 6.7 percent posted in 2017, the consultancy said in a publication.
The forecast, however, falls below the government’s 7.0-8.0 percent target.
Still, Wallace Business Forum said: “This means that the Philippines will continue to be among the best performers among the emerging market economies of Asia for the seventh straight year, and will remain on track with its poverty reduction goal over the medium-term.”
Household spending will accelerate as a result of the lowering of individual income tax rates, which is expected to boost household budgets by an aggregate P140 billion, it said.
An additional push to private consumption will come from subdued inflationary expectations and the increased peso value of remittances sent home by overseas Filipino workers.
“And with improved global outlook, there will be more opportunities for overseas employment. At the same time, domestic employment prospects will be better with the sustained high rate of economic growth,” it said.
Wallace Business Forum also said that fixed investment growth would be supported by infrastructure spending and capacity expansion by some export-oriented industries.
Exports, though, are expected to slow from 2017 but still increase at a respectable rate above the world average, “thanks partly to these foreseen increases in production capacity to meet rising global demand”.
The consultancy also noted that the industrial sector, lifted by construction and manufacturing, would again be the growth pace-setter in 2018.
Services will also show an acceleration given significant gains in banking, transport, trade and health care.
“Business process outsourcing (BPO), though, will post some weakening due in large part to the slowdown in the voice segment as it approaches the natural growth of 4 percent to 5 percent in the talent pool,” it warned.
Other segments like healthcare information management, back offices and shared services will partly help compensate.
Meanwhile, after recording a high rate of growth due to the low base in the previous two years, the agriculture sector is expected to start reverting to near its historical average increase at 3 percent in 2018.