Stronger economic growth seen in 2012
THE Philippine economy is seen to grow at a faster pace this year supported by projected higher government expenditures, robust dollar remittances and improved consumption spending, according to the investment banking arm of the Metrobank Group.
The country’s gross domestic product (GDP) is expected to grow by 5 percent to 6 percent this year, tracking the government’s projection, economist Victor Abola said in a joint University of Asia and the Pacific and First Metro Investment Corp. (FMIC) briefing.
“The Philippines has shown vigorous economic growth in the past couple of years and the outlook for 2012 is very positive,” said Francisco Sebastian, FMIC chairman.
“Public debt has been steadily reduced, the country now experiences lower inflation and monetary easing, 2.1 million jobs
were created last year and the national government has shown indication that it is serious in implementing its fiscal policies and reform measures,” he added.
The Philippines grew by 3.6 percent in the first three quarters of 2011. The government’s 2011 full-year forecast is pegged at 4.5 percent to 5.5 percent.
Lagging sectors in the previous year, agriculture, mining, construction and manufacturing are seen to get the economy into the fast lane.
Plagued by La Niña in 2011, the mining and agricultural sector may stage a rebound, with the latter seen to yield a 4-percent uptick in production. Construction activities will also receive a boost from the government, which is releasing in the first quarter more than P140 billion or 60 percent of its total spending for infrastructure.
At least eight public-private partnership projects are also expected to be bidded out, coupled with a modest 4 percent to 5 percent growth in private construction.
“In short, the industrial sector is likely to lead growth in 2012, while services should continue to provide steady growth easily above 5 percent,” Abola said.
Despite existing crises in the United States and the euro zone, money sent home by overseas Filipinos will continue to be resilient with a 5 percent to 7 percent improvement.
Following a negative performance in 2011, exports may likely grow by 5 to 7 percent, while imports will likely slow down at 10 percent.
Full-year inflation is anticipated to ease at 3.5 percent to 3.7 percent from 3.5 percent given the relatively stable crude oil prices forecast.
The peso-dollar rate is expected at P43 to P45 per US dollar as the world’s largest economy may continue to outperform Europe and Japan, bolstering its status as a safe haven.
Intact fundamentals
Despite lingering woes overseas, the fundamentals of the Philippines have remained intact highlighted by robust investment inflows, strong market appetite, lower borrowing cost, liquidity and faster than expected capacity to pay debt, making the country ripe for a ratings upgrade, Sebastian said.
“Philippine upgrades for all intent and purposes also means that the Philippines, credit-wise, is de facto upgraded, with or without the formal concurrence of rating agencies since markets both offshore and onshore is already pricing Philippine debts instruments at investment grade levels,” said Roberto Juanchito Dispo, FMIC president.
Fitch Ratings rate the country “BB+,” a notch away from investment grade level. Moody’s Investor Service and S& P rate the country “BB” and “Ba2,” respectively, indicating two levels below investment grade.
Monetary policy will turn from tight to easy in the first quarter and relatively stable for the rest of the year. Treasury bills interest rates are projected as follows: 91-day at 3 percent; five-year at 4.75 percent; 10-year at 5 percent; and 25-year at 6 percent. September 2010 to December 2011. The first three were addressed to House Secretary General Marilyn B. Yap. The fourth and most recent letter dated Dec. 19, 2011 was addressed to the House justice committee chair, Iloilo Rep. Niel Tupas Jr., lead prosecutor in the Corona impeachment trial.
Simultaneously, also on Dec. 19, 2011, the PCIJ sent a new request letter to the Supreme Court addressed to Court Administrator Midas P. Marquez, in yet another effort to secure the SALNS of Corona and his 14 associate justices, from their first year of appointment to the tribunal.
Last week, Marquez had promised to give the PCIJ an official statement from the tribunal on its latest request but also said that because of Corona’s upcoming impeachment trial, positive action may not come. The first en banc session of the high court is scheduled on Jan. 17, 2012 yet, he said.
In October 2008, the PCIJ had filed a pleading with the “Special Committee to Review the Policy on SALNS and PDS” chaired by then Justice Minita V. ChicoNazario that the en banc had created, in response to repeated requests that PCIJ had filed since 2001 for the SALNS of the justices and judges.
The PCIJ is a party to the Administrative Matter 09- 8- 06 SC and 09- 8- 07CA cases filed with the committee.