Slowing PH growth ‘temporary’ – Moody’s

One of the three major international credit rating agencies further lowered its economic growth forecast for the Philippines this year following the slower expansion pace registered in the second quarter.

In its report released yesterday, Moody's Investors Service said the rating agency expects the country’s economy, as measured by gross domestic product (GDP), to expand by 5.8 percent in 2019, slower than its earlier forecast of 6.0 percent.

The latest economic growth forecast released by Moody’s is its second revision for 2019’s GDP estimate from the original 6.2 percent and 6.0 percent in June.

However, Moody’s still said the slower economic growth last quarter was just “temporary” as the nation continues to feel the pinch of the delayed approval of this year’s national budget.

Moody’s said the local economy is expected to recover as the country’s long-term positive prospects remain intact and supported by favorable demographics, strong human capital and infrastructure investments.

“Against the backdrop of weakening external demand, Moody's expects economic growth to recover from the temporary slowdown precipitated by the budget delay in the first half of 2019,” Moody’s said

According to Moody’s, “the momentum for fiscal reform has been sustained, improving prospects for a further improvement in the Philippines' fiscal profile.”

Moody’s added that broad macroeconomic and financial stability remains intact, citing headline inflation has been restored to within the central bank's target band, while the balance of payments has remained stable despite a widening trade deficit.

“Our assessment of the Philippines' economic strength is ‘High,’ which balances its large size and fast growth against lowincome levels,” Moody’s said.