RO­BUST PH GROWTH SEEN BUT RISK RIS­ING – MOODY’S

Manila Times - - FRONT PAGE - BY MAYVELIN U. CARABALLO

PHILIP­PINE eco­nomic growth is ex­pected to re­main strong but risks to this out­look are ris­ing, Moody’s In­vestors Ser­vice said.

“We project real GDP (gross do­mes­tic prod­uct) growth to be sta­ble for the re­main­der of 2017 and to av­er­age 6.5 per­cent for the whole year, although at the lower end of the gov­ern­ment’s fore­cast range of 6.5 per­cent to 7.5 per­cent,” the debt watcher said in a re­port on Fri­day.

Moody’s full-year fore­cast rep­re­sents a slow­down from 2016’s ac­tual GDP growth of 6.9 per­cent.

The Philip­pine econ­omy grew by 6.5 per­cent in the sec­ond quar­ter, pick­ing up from the 6.4 per­cent recorded in the first three months of the year but down from the 7.1 per­cent posted a year ear­lier.

Year to date growth, at 6.4 per­cent, re­mains be­low tar­get.

“We ex­pect ro­bust eco­nomic growth to be sus­tained over the next few years, aided by the gov­ern­ment’s fo­cus on in­fra­struc­ture de­vel­op­ment, buoy­ant pri­vate sec­tor in­vest­ment, and the re­cov­ery in ex­ter­nal de­mand,” Moody’s said.

How­ever, the debt watcher pointed out that the re- emer­gence of war in the south­ern Philip­pines, as well as the Duterte ad­min­is­tra­tion’s fo­cus on the erad­i­ca­tion of il­le­gal drugs, “rep­re­sents a ris­ing but un­likely risk of a de­te­ri­o­ra­tion in eco­nomic per­for­mance and in­sti­tu­tional strength.”

Moody’s said po­lit­i­cal an­a­lysts and gov­ern­ment crit­ics were con­cerned over an ex­pan­sion of mar­tial law in Min­danao.

“An unchecked ex­pan­sion of the Pres­i­dent’s au­thor­ity could weaken con­sti­tu­tional checks and bal­ances, and un­der­mine the buoy­ant pri­vate sec­tor sen­ti­ment that has un­der­pinned the Philip­pines’s ro­bust eco­nomic per­for­mance,” it said.

More­over, Moody’s said that while it ex­pected a con­tin­u­a­tion of strong eco­nomic and fis­cal gov­er­nance, a pro­longed fo­cus on po­lit­i­cal mat­ters could draw at­ten­tion away from the gov­ern­ment’s re­form agenda, par­tic­u­larly eco­nomic and fis­cal changes such asCom­pre­hen­sive Tax Re­form Pro­gram.

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