HSBC: Consumption to protect PH

million this year, down about 16 percent, while employment in construction had increased about 84 percent during the same time period from 2.1 million to 3.8 million.

“This also means a shift from rural to urban areas where most of the construction projects are centered. The higher incomes and increased availability of goods and services in urban areas should also bode well for overall consumption,” it added.

While some might note that growth in private consumption declined considerably in the third quarter of 2017 — growing just 4.5 percent year-on-year compared to its long-term trend of around 5 percent, HSBC said this was primarily due to idiosyncratic factors such as the sharp fall in remittances in September and a high consumption base from the previous year.

“In fact, lower-than-expected remittances in September could signal some payback for the year-end with higher-than-usual transfers, considering remittances growth has overall been quite robust in 2017,” it said.

In September, personal remittances slumped to its lowest level

“Thus we expect private consumption growth to lift back up above its long-term trend in fourth quarter and to stay there for the rest of 2018,” it added.

Not all is smooth sailing, however, as HSBC said underlying data also suggested that shifting from agriculture to construction, which is largely male- dominated, could lead to temporary unemployment and/ or perhaps employment in the informal sector.

The rise in male unemployment, it added, may have also contributed to lower consumption growth in the third quarter and posed a risk to growth if the government would be unable to achieve its infrastructure ambitions.

For now, however, HSBC said “Our base case remains that the government will push through its infrastructure agenda, which also leaves us constructive on the Philippines’ growth and consumption in the years to come”.