MANILA — Analysts at First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) expect the Philippine economy growing by 6.2 percent to 6.6 percent this year, as consumer spending rebounds and the national government infrastructure spending accelerate.
“This is really the key here: the strong consumer spending that we expect not only this year but in the coming years,” Dr. Victor Abola, an economist at UA&P, said in a press briefing Tuesday.
Abola attributed the strong consumer spending to the country’s low inflation and interest rates, and historically low unemployment rate, the underemployment rate, and poverty rate.
He also cited the national government’s catch-up plan to bring infrastructure spending to 5.7 percent of the country’s gross domestic product (GDP) in 2020, rising to over 7 percent in 2022.
Abola said a solid services sector is also expected to fuel economic growth this year while industry will be boosted by construction as “private construction is going quite well”.
From 2020 to 2022, the government targets a 6.5-percent to 7.5-percent GDP growth.
The economy surged by 6.2 percent in the third quarter of 2019, bringing the nine-month average to 5.8 percent.
FMIC president Rabboni Francis Arjonillo said consumer spending, which accounts for 66 percent of the GDP, will expand further driven by robust government and infrastructure spending, higher employment rate, manageable inflation, and robust overseas Filipino workers (OFWs)remittances.
Easing monetary conditions and growing tourism sector will also boost the economy, he said.
Inflation, which dropped from 5.2 percent in 2018 to 2.5 percent in 2019, is predicted to stay low at 2.5 to 2.8 percent this year.
Remittances from OFWs, which grew 4.6 percent to USD24.8 billion, are expected to remain resilient and to maintain its 2 percent-4 percent growth. (PNA)
Photo Credit: Philippine News Agency