THINK TANK UPS PH GDP FORECAST

Economists watching the Philippines have hiked their growth expectations for 2022 to an average of 6.9 percent, but Barcelona-based think tank FocusEconomics said high inflation would likely dampen prospects for the consumption-driven nation.

FocusEconomics said its panel of economists upped their consensus gross domestic product (GDP) growth forecast for the Philippines from 6.7 percent previously, making it possibly the fastest economic expansion in Asean this year.

“Support will come from reduced COVID-19 restrictions, expansionary fiscal and monetary stances, and the government’s ‘Build, Build, Build’ infrastructure program,” it said in a June 21 report.

The updated projection, however, remained below the government’s downscaled 7- to 8-percent GDP growth goal for 2022.

Following the stronger-than-expected 8.3-percent GDP growth in the first quarter, FocusEconomics said the Philippines’ second quarter expansion was “likely to remain one of the fastest in the region.”

“Private spending will continue to be boosted by loosened COVID-19 restrictions. Notably, the manufacturing PMI (purchasing managers’ index) rose at the fastest rate in nearly five years in April,” it said.

Just as the election ban on new publicly funded projects dampened government spending at the start of this year, FocusEconomics said high consumer prices would also hamper private consumption.

Due to expensive oil and food globally spilling over locally, headline inflation hit a 3.5-year high of 5.4 percent in May, bringing the five-month average to 4.1 percent or above the 2- to 4-percent target range deemed as manageable price hikes conducive to growth.