Maybank sees PH GDP growing by 7% this year

SINGAPORE — Regional investment powerhouse Maybank Kim Eng Group sees the Philippines growing by 7 percent this year as the Duterte administration's ambitious “Build, Build, Build” program may finally show more "visible impact" on the economy.

This is within the Philippine government’s target range of 7 percent to 8 percent annual gross domestic product (GDP) growth from 2018 to 2022.

"We are pretty constructive on the Philippine economy this year. We see growth can actually pick up a bit to seven percent from last year’s 6.7 percent so marginally better this year," Maybank Kim Eng Regional Head for Economic Research Suhaimi Ilias told Philippinebased media on the sidelines of Maybank Invest ASEAN Singapore Conference held here.

And despite the challenges, the Philippines would still "probably the strongest growing core ASEAN economy", he added. Ilias said the key factor behind that is "we actually believe this year would be the year we are going to see a much more visible impact of President Duterte’s ‘Build Build Build’ infrastructure program that has been talked about for quite some time but I guess over the past one year has not really materialized much."

"But having said that thing, even with that kind of situation, the Philippine economy has been doing well," he further said.

The Department of Finance (DOF) has recently assured the public of the financial sustainability of the Duterte administration’s “Build, Build, Build” program that is designed to modernize the country’s infrastructure backbone by rolling out 75 flagship projects worth a combined total of $36 billion in investments.

Ilias said the passage of Tax Reform for Acceleration and Inclusion (TRAIN) law is a good development for the country as it addresses the issue on how to fund this infrastructure program.

Aside from this, Ilias said the Philippine economy's fundamentals "is good in the sense that domestic demand is basically intact, [as well as] consumer spending, and investments."

"That is also being supported especially last year where we see the situation of synchronized global economic growth that is driven by expansion in the G3 economies of the US, Eurozone and Japan, which obviously result in a healthy world trade activities," Ilias said.

"And I think the Philippines, just like many of us here in Asian economies, always benefit when global economic environment is good and that translates into good export performance," he added.

Maybank's GDP forecast is a bit optimistic, at least compared to that of World Bank's, which expects the Philippines to grow 6.7 percent in 2018 and 2019, before growing at a slightly slower rate of 6.5 percent in 2020.

World bank's forecast is also below the government's target.

Last year, the Philippine GDP grew 6.7 percent, which is slower than the 6.9 percent recorded in 2016. Despite the slowdown, the growth was still well within the 6.5 to 7.5 percent target set by economic managers for last year.

In its forecast made last year, Maybank Kim Eng was expecting the Philippine GDP growth to remain strong at 6.5 percent this year.

During the same conference last year, Maybank said the Philippines will continue to grow at the fastest pace among key Southeast Asian economies, or at least within Asean-6.

ASEAN-6 is comprised of Philippines, Malaysia, Singapore, Indonesia, Thailand, and Vietnam.

Maybank Kim Eng particulary expects its six core markets in the ASEAN-6 to grow by an average 4.8 percent compared to 4.6 percent last year.