OECD forecasts
growth in 2017 second half anticipated to be slightly faster than in
A clearer picture of full- year growth will be available on Thursday when the government releases third quarter GDP data. A
poll of analysts resulted in a tight forecast range of 6.3 percent to 6.6 percent.
5-yr growth
The Centre, meanwhile, also said that average Philippine growth from 2018 to 2022 was expected to reach 6.4 percent, better than the 5.9 percent recorded from 2011 to 2015.
“Private consumption, which has maintained its share of about 70 percent of the economy since 2000, will continue to loom large,” it said.
A proposed reduction in the personal income tax rate of a sig - wide, contained in proposed tax legislation, should contribute to consumer spending momentum.
Consistent growth in remittances from overseas workers is another positive factor and government spending is also expected to gain momentum should planned major infrastructure projects go forward.
“On the other hand, the investment outlook is modest. Even though domestic and external demand have been quite robust, the pullback in fixed investment growth—from double digits since 2014 (peaking at more than 30 percent in second quarter 2016) to below 9.4 percent in second quarter 2017—signals some apprehension among investors, albeit not to a worrisome degree at this point,” the Centre noted.
Meanwhile, it said that full liberalization of the banking sector and an increased focus on e-commerce services would attract interest among offshore investors in coming years.
Manufacturing, especially the
For the second basket of projects, the Philippines and China agreed to line up an estimated $3.98 billion in loans that could include $947.64 million for the Subic-Clark Railway and $424.81 million for the Davao City Expressway, which are still undergoing feasibility studies.
The IFG said agreements for several of these projects would be signed by officials of the two governments during bilateral meetings to be held at the sidelines of the Association of Southeast Asian Nations (Asean) +3 (China, Japan, Korea) Summit this week.
Chinese Premier Li Keqiang, who is representing Chinese President Xi Jinping, is expected to witness the signing of the bilateral agreements. semiconductor business, is also well positioned to capture opportunities presented by improvements in external conditions, although issues related to electricity cost and stability require further action.
On the other hand, it said that “commitments in business process outsourcing have reportedly fallen, according to the PSA (Philippine Statistics Authority) … while anecdotal evidence shows that revenue growth is slowing down.”
Investments in the mining sector were also said to have remained subdued in the absence of a clear regulatory framework.
Infrastructure
As highlighted in the 2017-2022 Philippine Development Plan 2017-2022, the Centre said there was a need to address the country’s underdeveloped infrastructure.
While improvements have been made in recent years, additional are needed to keep up with demand in the fast-growing economy, it noted.
While the government is looking to attract investors for publicprivate partnerships (PPPs), the think tank noted challenges such as the absence of a deep long-term fund pool, which means that private project developers would bear higher credit costs.
“The PPP Center could be strengthened in terms of its mandate and resources. While the bond market could provide an alternative source of development; the ratio of the total outstanding value of local-currency bonds to GDP remains relatively small,” it suggested.
Lastly, the Centre said that nontraditional tools, such as levies to capture the appreciation in land value resulting from infrastructure development, could be considered to raise revenues.
Aside from the loans, China has also provided a total of $ 148.22 million in grants of which $ 99.27 million will be used for the construction of the Binondo- Intramuros bridge and the Estrella- Pantaleon bridge across the Pasig River to help ease traffic congestion in Metro Manila.
The grant, which covers 100 percent of the total cost for the projects, also includes $22.95 million for the construction of two drug rehabilitation facilities; $23 million to aid in Marawi’s rehabilitation program, and donation of heavy equipment worth $3 million also for the government’s reconstruction efforts in Marawi, the IFG said.