IMF upgrades Phl growth forecast
MANILA, Philippines - The International Monetary Fund (IMF) has upgraded its full-year forecast for Philippine economic growth to 6.3 percent this year on the back of reconstruction efforts following Super Typhoon Yolanda and the expected rise in merchandise exports.
“We upgraded the 2014 [forecast] to 6.3 percent based partly on slightly better advanced economies outlook which would mean the external sector in the Philippines would improve,” IMF resident representative Shanaka Jayanath Peiris said in a briefing yesterday.
“Then you have the counteracting effects of Yolanda which would be negative but we believe the impact is relatively limited... but the reconstruction will have a positive impact on the fiscal stimulus,” he continued.
Peiris explained rosy prospects for the advanced economies this year such as the US will help increase Philippine merchandise exports. The government hopes to grow its outbound shipments by six percent this year from year-ago levels.
Meanwhile, planned rehabilitation and reconstruction efforts following Yolanda which hit the country in November will boost government spending and drive economic growth.
Budget Secretary Butch Abad has said the government will be spending P360.8 billion over three years for rebuilding efforts following Yolanda.
IMF’s current projection is slightly higher than its September forecast of six percent but still below the government’s target of 6.5 percent to 7.5 percent.
Peiris recounted the lower figure as compared to the government’s target is due to a high base in 2013, during which economic growth has already averaged 7.4 percent as of September.
“But if the reconstruction [efforts] are implemented in the medium-term, growth can be anywhere between 6.5 and 7.5 percent. That is, if spending happens according to government’s plans,” Peiris pointed out.
The Fund expects Philippine gross domestic product to have settled at 6.8 percent in 2013, unchanged from its September projection.
“Growth was strong last year because of the strong government spending,” Peiris recounted.
This, however, decelerated in the latter part as government spending and construction also slowed down, he added.
Official 2013 economic growth data will be released by the government on Jan. 30, although officials earlier said GDP may still hit the upper-end of the six to seven percent target.
The main risk for the Philippine economy this year remain to be capital outflows resulting from portfolio rebalancing after the US Federal Reserve announced a modest cut in its monthly asset purchases to $75 billion, Peiris said.
Meanwhile, economic growth is expected to pick up to 6.6 percent next year, Peiris said, noting this is a preliminary number based on initial reconstruction needs and spending plans of the government.
MANILA, Philippines - The International Monetary Fund (IMF) has upgraded its full-year forecast for Philippine economic growth to 6.3 percent this year on the back of reconstruction efforts following Super Typhoon Yolanda and the expected rise in merchandise exports.
“We upgraded the 2014 [forecast] to 6.3 percent based partly on slightly better advanced economies outlook which would mean the external sector in the Philippines would improve,” IMF resident representative Shanaka Jayanath Peiris said in a briefing yesterday.
“Then you have the counteracting effects of Yolanda which would be negative but we believe the impact is relatively limited... but the reconstruction will have a positive impact on the fiscal stimulus,” he continued.
Peiris explained rosy prospects for the advanced economies this year such as the US will help increase Philippine merchandise exports. The government hopes to grow its outbound shipments by six percent this year from year-ago levels.
Meanwhile, planned rehabilitation and reconstruction efforts following Yolanda which hit the country in November will boost government spending and drive economic growth.
Budget Secretary Butch Abad has said the government will be spending P360.8 billion over three years for rebuilding efforts following Yolanda.
IMF’s current projection is slightly higher than its September forecast of six percent but still below the government’s target of 6.5 percent to 7.5 percent.
Peiris recounted the lower figure as compared to the government’s target is due to a high base in 2013, during which economic growth has already averaged 7.4 percent as of September.
“But if the reconstruction [efforts] are implemented in the medium-term, growth can be anywhere between 6.5 and 7.5 percent. That is, if spending happens according to government’s plans,” Peiris pointed out.
The Fund expects Philippine gross domestic product to have settled at 6.8 percent in 2013, unchanged from its September projection.
“Growth was strong last year because of the strong government spending,” Peiris recounted.
This, however, decelerated in the latter part as government spending and construction also slowed down, he added.
Official 2013 economic growth data will be released by the government on Jan. 30, although officials earlier said GDP may still hit the upper-end of the six to seven percent target.
The main risk for the Philippine economy this year remain to be capital outflows resulting from portfolio rebalancing after the US Federal Reserve announced a modest cut in its monthly asset purchases to $75 billion, Peiris said.
Meanwhile, economic growth is expected to pick up to 6.6 percent next year, Peiris said, noting this is a preliminary number based on initial reconstruction needs and spending plans of the government.
