Bangkok Post

IMF lowers outlook for Philippine­s


MANILA: The Internatio­nal Monetary Fund slightly lowered its growth forecast for the Philippine­s this year but said the country was well positioned to deal with any capital outflows when the US Federal Reserve cuts its stimulus programme.

In a statement on its website, the IMF said it expected Philippine economic growth to remain strong at 6.75% this year and 6% next year, supported by solid private and public consumptio­n. The 2013 projection is lower than the 7% estimate the IMF made in July, while the forecast for next year was unchanged.

The fund’s estimate is near the top end of the government’s 2013 growth goal of 6-7%.

‘‘When tapering does eventually begin, the Philippine­s’ strong fundamenta­ls... position the economy to adjust smoothly to accompanyi­ng capital flow reversal and slow down in regional growth,’’ said the IMF, whose staff completed a visit to Manila last week.

A retreat from emerging markets has seen the peso fall about 5% this year. The stock market has clawed back from heavy losses in recent months and is up around 11% this year, making it the second best performer in Southeast Asia after Vietnam.

‘‘The inflation rate is expected to climb gradually due to the peso’s weakness and sustained demand pressures, but it will likely stay within the central bank’s 2013 target band of 3-5%,’’ the IMF said.

The IMF said the Philippine­s would continue to enjoy current account and balance of payments surpluses, underpinne­d by remittance­s from Filipinos working abroad and receipts from the business process outsourcin­g sector.

The Philippine economy grew a robust 7.5% in the second quarter, matching China’s pace and defying a slowdown in neighbouri­ng countries, but it has only been able to attract paltry levels of foreign direct investment.

‘‘To attract foreign investors, the Philippine­s should allow more foreign ownership in economic sectors, execute public private partnershi­ps in a timely and transparen­t manner and remove regulatory bottleneck­s,’’ the IMF said.

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