IMF, AMRO see slower PHL growth for this year

THE PHILIPPINES will likely remain a growth leader in Southeast Asia, the International Monetary Fund (IMF) and regional think tank ASEAN+3 Macroeconomic Research Office (AMRO) said, pencilling a 6.6% forecast for 2017 compared to 2016’s 6.9%.

The IMF expects Philippine gross domestic product (GDP) to expand by 6.6% this year, according to its World Economic Outlook ( WEO) published yesterday. The multilateral lender retained the tempered outlook that it gave during its annual health check last August.

“The 6.6% growth forecast for 2017 is the same as we released during the recent Article IV consultation. We see continued robust domestic demand driven by investment and consumption, and fiscal policy is supportive of growth; hence, no change to our forecast,” Yang Yongzheng, IMF’s new country representative, said

in an e-mailed response to reporters’ queries. Growth was expected to clock 6.8% back in April.

IMF representatives who visited Manila on July 26-Aug. 9 said the Philippines is poised to enjoy “very strong” growth in the coming years, supported by the passage of the first of up to five tax reform packages now being tackled at the Senate as well as the government’s “rightfully aggressive” spending plans on infrastructure.

If realized, the IMF growth forecast means the Philippines will be able to hit the 6.5-7.5% growth goal the government has set for the year.

Philippine GDP grew by 6.4% last semester, with economic managers expecting faster growth this semester as more infrastructure projects are rolled out and with the onset of the Christmas season. Central bank Governor Nestor A. Espenilla, Jr. has said the government’s growth target remains “attainable” so far.

The Philippines will lead ASEAN-5 this year, the IMF said, closely followed by Vietnam with 6.3%; Malaysia, 5.4%; Indonesia, 5.2% and Thailand with 3.7%.

“In the rest of emerging market and developing Asia, growth is expected to be vigorous and marginally higher than in the April 2017 WEO,” the IMF said, projecting Asian economies to grow 5.6% this year, faster than 2016’s actual 5.4%.

The Washington D. C.- based multilateral lender sees China leading Asia growth this year with 6.8%, followed by India with 6.7%.

Philippine inflation is expected to remain manageable, averaging 3.1% this year and 3.0% in 2018, falling within the 2-4% target band set by the central bank.

For 2018, the IMF expects Philippine GDP to grow 6.7%, slower than the 6.9% estimate announced earlier this year and missing the state’s 7-8% goal.

Yesterday also saw AMRO cutting its Philippine growth outlook for this year and 2018 due to a slower rise in investment and consumption. —

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