Higher than 6% growth projected for PH

MANILA—The Philippine economy is expected to exceed the government’s growth target for 2013 given the strong output in the first half of the year.

As measured by gross domestic product (GDP), the economy grew by 7.6 percent as of end-June this year, same as China’s expansion and higher than 6.4 percent in the same months last year.

Growth in the second quarter remained robust at 7.5 percent but this is slower than the previous quarter’s 7.7 percent, which was also similar to that of China.

Government’s growth target for this year is between six to seven percent.

Analysts said the slight slowdown, although not worrisome, remains a factor to look out for.

Banco de Oro Unibank (BDO) chief strategist Jonathan Ravelas likened the Philippine economy to a car and eyes a growth of 7 to 7.5 percent.

“What we want is consistent growth at least six to seven percent. So anything above seven percent is a saving grace. It’s a bonus,” he told PNA in an interview.

He lauded the consistent six percent-level expansion of the domestic economy for several quarters now.

Ravelas said the issue surrounding the Priority Development Assistance Fund (PDAF) should be addressed as soon as possible since this might put a dent on public infrastructure spending.

Eye on the peso

“If we could hasten public infrastructure spending, that should spur more activity,” he said.

Ravelas said the recent flooding in Metro Manila and several nearby provinces could negatively impact on growth but the weakening peso is a mitigating factor.

He said peso depreciation is positive on families of overseas Filipino work- ers (OFWs) and business process outsourcing (BPO) employees, as this increases the peso-value of their dollars.

Consumer spending accounts for about 70 percent of the country’s output, so remittances and BPO receipts are important factors.

Bank of the Philippine Islands lead economist Emilio S. Neri Jr. expects a “slightly below seven percent” growth for the domestic economy this year.

Similarly, Hongkong and Shanghai Banking Corp. economist Trinh Nguyen, in a research note, revised upwards the bank’s growth forecast for the country this year to 7.1 percent from 6.4 percent.