THE United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has raised its 2016 growth forecast for the Philippines to 7 percent, tagging the economy as one of the strongest in Southeast Asia.
In the year-end update of its flagship report, the Economic and Social Survey for Asia and the Pacific 2016, Unescap said economic growth is on a gradual upward trend in Southeast Asia because of higher growth in Indonesia and Thailand and sustained high growth rates of 6 percent to 8 percent in the Philippines and the so-called CLMV economies–Cambodia, Lao People’s Democratic Republic, Myanmar and Vietnam.
“In the Philippines, strong household spending was underpinned by favorable employment conditions, higher workers’ remittances, higher civil service salaries and spending related to the general elections in May 2016. Fixed investment has surged in recent quarters,” it said.
With this, Unescap noted that it now sees the economy growing by 7 percent this year—higher than its 6 percent projection in April—before moderating to 6.2 percent in 2017.
Earlier, multilateral lenders Asian Development Bank (ADB) and the International Monetary Fund (IMF) said they also see higher growth for the economy this year, reflecting the strong third-quarter expansion.
The Philippine GDP exceeded expectations in July to September, accelerating by 7.1 percent from a revised 6.2 percent a year earlier.
ADB has revised upward its growth outlook to 6.8 percent from 6.4 percent earlier, while the IMF said it will mostly likely be revising its Philippine growth forecast in its next round of revisions for the world economic outlook.
Meanwhile, global banks Nomura, Barclays and HSBC are forecasting growth rates of 6.8 percent to 6.9 percent for the whole of 2016.
The government has set a GDP growth goal of 6 percent to 7 percent for this year, from the actual 5.8 percent recorded in 2015.
The economy only needs to grow by at least 3.4 percent in the fourth quarter to hit the low-end target of 6 percent, and by 6.9 percent to reach 7 percent, according to the National Economic and Development Authority (NEDA).