Phl to hit 6.5-7.0% GDP growth target this year

The Philippines is on track to sustain growth in the fourth quarter, “easily” hitting its 6.5- to 7.0-percent gross domestic product target for the year, First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in a report released Tuesday.

“We think that PHL is off to a good start in Q4 tracking ... economic indicators and following GDP acceleration in Q3. Furthermore, we believe that our 6.5 percent to 7.0 percent full-year target will easily be hit,” FMIC and UA&P said in the December 2017 issue of “The Market Call.”

The inter-agency Development Budget Coordination Committee (DBCC) announced last year the growth targets of 6.5- to 7.0-percent this year and 7.0to 8.0-percent from 2018 to 2022.

The GDP, a measure of the goods and services a country produces in a given period, expanded by 6.9 percent in the third quarter to beat the market consensus of 6.6 percent.

In the fourth-quarter, growth may be driven by improvements exports and infrastructure spending, according to FMIC and UA&P.

“Infrastructure spending’s 17.8-percent jump in October and positive exports performance, and along with the rebound in foreign investment and slower inflation, augur well for ... acceleration of GDP growth in Q4,” it said.

It noted, however, that inflation may accelerate in January given the passage of the Tax Reform for Acceleration and Inclusion bill into law.

“Inflation should remain at 3.3-percent in December, but do expect a sharp jump in January with the congressional approval of higher fuel taxes, sin taxes (alcohol, beer, and cigarettes), a new tax on sugar-based beverages, a slew of other taxes, and less exemptions for VAT,” it said.

The new tax reform law aims to reduce the personal income tax and expand the value-added tax (VAT) base. (GMA News Online)