HSBC: Consumption to protect PH from risks

CONSUMPTION will continue to drive the Philippine economy in the near future, HSBC said, insulating the country against external headwinds.

In a report released on Friday, the London-based bank said that consumption remained the primary anchor of growth, constituting over 70 percent of gross domestic product.

Private consumption was said to have remained strong over the years due to robust remittances and a continued decline in unemployment. Meanwhile, continued expansion in public spending has resulted not just in an acceleration of infrastructure outlays but also a pick-up in government consumption, it added.

“Taken together, Philippine domestic demand often largely offsets the external sector’s (net exports) negative contribution to growth. We believe this trend is likely to continue in the foreseeable future, resulting in the Philippines remaining relatively insulated to external growth risks,” the lender said.

Moving forward, HSBC said that rising urbanization should continue to drive consumption growth, with recent labor statistics suggesting the country’s workforce is gradually shifting from agriculture to construction in an effort to take part in the government’s infrastructure push.

It noted that employment in agriculture had declined from over 12 million in 2012 to just over 10

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