FMIC sees Philippine economy growing 7.5-8% in 2013

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The First Metro Investment Group sees 2013 to be another banner year for the Philippines, expecting the domestic economy to expand by 7.5-8 percent alongside a benign inflation environment, record-low interest rates and a bullish stock market.

The above-trend economic growth forecast for 2013 is seen supporting a 20-percent average growth in corporate earnings and, in turn, propelling the main-share Philippine Stock Exchange index toward 6,800 this year.

Heavy election spending, increased infrastructure projects, robust consumer and service sectors and stronger tourism and gaming are seen as supporting a gross domestic product (GDP) growth of above 7.5 percent in 2013, much higher than the country's trend growth of below 5 percent prior to the last presidential elections in 2010.

"With a 7.1 percent increase in GDP in the third quarter of 2012, a lower-than-expected inflation rate of 3.2 percent, gross international reserves rising rapidly that have reached $84.1 billion and a debt-to-GDP ratio that has fallen below 50 percent, the Philippines is definitely now on the rise," said FMIC chairman Francisco Sebastian.

"The economy is in an unprecedented growth momentum, supported by solid fundamentals," he said.

Interest rates are anticipated to further ease due to lower inflation, a much-awaited upgrade to a sovereign investment grade rating, massive liquidity and limited supply of Philippine debt papers.

"As a result of robust economic growth, the government's pungent anti-corruption stance that has improved tax administration and with new tax revenue sources, budget deficit will remain low and may not reach P200 billion or 1.5-1.6 percent of GDP," said FMIC president Roberto Juanchito Dispo.

Economist Victor Abola of the University of Asia and the Pacific, FMIC's partner in its monthly research publication, said public sector consolidation would be a necessary condition to the country's take-off. "It's a very important development that debt-to-GDP ratio falls below 50 percent this year and will progressively go down further. The debt-to-GDP ratio is below Malaysia's and by the end of this year, will be below Thailand's," he said.

With this fiscal consolidation, Abola said that public infrastructure spending could go full-blast while private sector and consumer spending as well as investments would likewise turn robust.

"For an economy growing at a fast pace, all engines must be in high speed and we're seeing both public and private sector doing that," he said. (http://is.gd/U6Gs2H)

Inquirer 

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Crashed US reconnaissance drone Found Floating in Philippines

A US reconnaissance drone sits on the tarmac at Edwin Andrews Airbase in the Philippines. (File photo)

Philippine navy officials said Monday a suspected American drone has been found floating in the ocean off a central province, prompting them to deploy a ship with ordnance experts after fishermen reported the object may have been a bomb.

The 3-meter (10-foot) orange BQM-74e drone marked "Navy" was found by a Filipino diver and fishermen off Masbate Island on Sunday and has been turned over to local navy authorities, Philippine navy officer Capt. Jason Rommel Galang said, adding it was not clear why the unmanned aerial vehicle ended up off Masbate.

"We will first study this drone but initially it appears to be a UAV used largely in reconnaissance," he stated, adding that it was not clear why the BQM-74E drone had crashed.

The US embassy in Manila was informed of the discovery of the drone, which is expected to be turned over to US authorities.

The Philippines has seen a resurgence of US troops since late 2011, when the White House announced a turn in Washington's foreign, economic and security policy toward the region.

Some 600 US soldiers have been stationed in the southern Philippines since 2002 to train local troops there.

Philippine President Benigno Aquino said last year that US drones were allowed to fly over the country for reconnaissance purposes.

U.S. Embassy spokeswoman Bettina Malone said efforts were under way to determine if the drone was one of those used in American military air target training exercises and why it was in the waters off Masbate, about 380 kilometers (235 miles) southeast of Manila. The type of drone found was not armed and not used for surveillance, she said.

Masbate is in a region where communist guerrillas have a presence. U.S. counterterrorism troops, who are barred from local combat, have used surveillance drones to help Filipino soldiers track down al-Qaida-linked extremists in the country's south. At least two U.S. drones have been reported to have crashed and were recovered by villagers in the past on southern Mindanao island. (http://is.gd/E2aW23 / http://is.gd/9IiAIa )

Press TV & ABC News 

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