Philippines remains a growth leader in Asia

At the meeting of ASEAN+3 Macroeconomic Research Office - Source: The Asset

The ASEAN+3 Regional Economic Outlook (AREO) assessed that the Philippines’ economic growth remains robust, although it eased slightly in 2017. Statistics show that the country’s GDP growth eased from 6.9 percent in 2016 to 6.7 percent last year as fixed investments decelerated.

“Private consumption also slowed but generally held up throughout the year, supported by gains in employment and sustained remittance inflows. After a weak first quarter, government disbursement improved in the succeeding three quarters to guide public spending higher,” said the report released on May 3.

But the Southeast Asian nation is expected to see GDP growth of 6.8 percent in 2018 and 6.9 percent the next year as “exports are expected to remain buoyant while hurdles to budget execution are gradually being overcome,” it added.

The implementation of the “Build Build Build”, the government's biggest infrastructure program, is also anticipated to boost growth momentum, the AMRO said.

The trusted policy advisor to the ASEAN 3 also forecast that the Philippines’ inflation will trend higher in 2018. “Higher food and energy prices pushed inflation to return within the 3 /- 1 percent target range in 2017 through February 2018 from 1.8 percent in 2016. Core inflation also inched higher on firm domestic demand.”

“On the back of the excise tax increases in the recently approved tax reform, higher crude oil prices, and the modest pass-through from the sustained depreciation of the peso, headline inflation is projected rise slightly above the 4 percent upper-end of the band in 2018,” according to the report.