NEDA chief: PH economy to expand faster in Q4

MANILA, Philippines – The National Economic and Development Authority (NEDA) is expecting that the Philippine economy will expand faster in the 4^th quarter of 2014, after the gross domestic product (GDP) growth in the third quarter of 5.3%.

“There are bright prospects to look forward to as the year ends. Our macroeconomic fundamentals remain strong,” NEDA Director-General Arsenio M. Balisacan said in a yearend briefing on Wednesday, December 17.

Among these bright prospects is the latest business expectations survey from the Bangko Sentral ng Pilipinas (BSP), citing that more firms remain optimistic about the country’s economic prospects.

The country’s export performance is also notable for the year, especially for high-value products, significantly contributing to overall economic growth, Balisacan said.

Philippine export growth is also expected to hit 10% in 2014, higher than the 8% government target, the Department of Trade and Industry said early December.

Balisacan said that since the second half of 2012, growth of the industry sector has  outpaced that of the services sector, consistent with the government strategy to promote the resurgence of industry and the manufacturing sub-sector, in particular.

“The services sector continues to be robust, especially the IT-BPM (information technology-business process management),” the NEDA chief added.

Growing household consumption, which is boosting growth, is also indicative of greater consumer confidence, Balisacan noted.

The tourism sub-sectors are also steadily recovering from a temporary setback due to the natural calamities that hit the country in late 2013.

The 6.8 million international tourist arrivals target for 2014 is also likely to be met, Balisacan said.

Typhoon Ruby (international name: Hagupit), which recently hit several areas in Luzon and Visayas this December, has a “very negligible” impact on the economy, Balisacan said.

To date, the damage caused by Ruby has a 0.03% impact on the GDP, though the agriculture sector was hit “slightly higher,” Balisacan said.

“However, the share of agriculture to GDP is only around 11%,” the NEDA chief said.

Also on Wednesday, the Asian Development Bank reported that it reduced its 2015 growth forecast for the country to 6.2% or down by 0.2 percentage points, attributed to the sluggish 3^rd quarter performance.

The economic experts, meanwhile, expressed in late-November a more guarded optimism for the country’s economic growth for 2014, and what to look forward to in early 2015.

For instance, the Hong Kong and Shanghai Banking Corporation Limited (HSBC) Global Research forecasted for 2014 a full-year growth of 5.9%, while 2015 expansion is set at 6.1%. This is 2.3% lower than the 8.2%-growth the country supposedly needs in the 4^th quarter to achieve the overall growth rate target for 2014.

Maybank Kim Eng Economic Research also set the same – down from its previous forecast of 6.7%. For 2015, Maybank lowered its GDP growth forecast to 7% from 7.5%. – Rappler.com