Philippine Economy likely grew over 6% in 2014 Q2 – FMIC

 

Economy likely grew over 6% in Q2 – FMIC

 

MANILA, Philippines - The country’s economy is forecast to expand by over six percent in the second quarter of 2014, slower than the 7.5-percent growth in the same period last year, according to First Metro Investment Corp. (FMIC).

Government forecasts gross domestic product (GDP) to grow between 6.5 to 7.5 percent this year.

In the first quarter of the year, the economy managed to expand a lower-than-expected 5.7 percent, as Super Typhoon Yolanda contributed to the poor performance.

But FMIC president Roberto Juanchito T.Dispo said clearer signs of recovery in the second quarter could serve as a positive momentum.

“We are quite confident that the economy will accelerate back towards the seven-percent growth part in the second half of 2014,” Dispo said. FMIC is a member of the Metrobank Group and one of the country’s leading investment firms.

He added that gains in industrial output look solid moving towards positive territory, employment growth at the start of the second quarter, and an anticipated momentum gain for government spending in the second semester of the year would get the Philippine economy back on track.

The FMIC executive said inflation is likely to accelerate in the third quarter to 4.8 percent or 0.5 percentage point higher than in the first three months of the year, due to the delayed importation of rice and the adverse impact on other food prices of Manila’s truck ban.

“We expect government spending to revert back to a 12-percent growth pace starting third quarter, with infrastructure spending continuing to lead the way,” Dispo said.

Exports are likewise seen to strengthen in the second semester as the US economy show solid signs of recovery with the help of speedier job creation. “China should continue to post seven-percent growth better for the second half, both adding to the demand for our export products,” the FMIC chief added.

The Bangko Sentral ng Pilipinas (BSP) is expected to raise policy rate by another 25 basis points (bps) and the reserve requirements by another 100 bps towards the end of the year.

FMIC said that corporate bond issuance should pick up for the rest of the second semester of 2014 as the large issuers in the market have reached the single-borrower limits (SBLs).

Meanwhile, the FMIC report cautioned that the equity market will have to absorb BSP’s tightening measures.

“Valuations remain stretched and the sustainability of valuations hinges on earnings catching up, or the economy continuing to register strong growth,” Dispo said, adding that poor first semester GDP growth would force a downward bias in revised economic forecasting.

Nonetheless, the investment firm believes that in the present state of the equity market remains positive as it continues to challenge the 7,100-level.

“With these in mind, we believe selectivity is key to outperformance and rotation to value and low beta plays are preferred. We continue to like banks due to M&A themes, potential re-rating catalyst, and gaming stocks with properties located at Entertainment City in Manila,” it added. - philSTAR

 

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Britain Said: Philippines could be "Asia's Next Superpower to Watch" in the next 20 years - unrivaled

NPPA/NPPA - MANILA, Philippines - Yahoo! interviews British Ambassador to the Philippines, Asif Ahmad, at the Yahoo! Philippines headquarters (Adrian Bautista/NPPA IMAGES)

 

PH is among Asia’s emerging powers, says British Ambassador

With its vast natural resources and an economic growth “that’s unrivaled by many across the region,” the Philippines is one of the emerging powers to watch, a diplomat has said.

“There’s no reason why over the next 20, 30 years, the Philippines will not fulfill the ambitions of what we believe the country has,” British Ambassador to the Philippines Asif Ahmad told Yahoo Philippines in a recent interview. Ahmad has been deployed to the country for over a year now. 

Ahmad said that among the members of the Association of Southeast Asia Nations (ASEAN), he perceives the Philippines “as a leading member of it.”

“We have created our links, we invest more time in terms of visits and attention than other countries. It’s part of our narrative of emerging powers and we see the Philippines as one of them,” he added, noting that this is also why Great Britain takes pride as the single-largest investor in the Philippines from the European Union.

Even politics does not appear to be a threat. In fact, Ahmad believes discussions on political developments such the Priority Development Assistance Fund (PDAF) and the Disbursement Allocation Program (DAP) are good.

“In any democracy, we see lively politics as being healthy and issues are being discussed in the open. It would be worse if corruption in the country like the Philippines or elsewhere was kept quiet or if the media are frightened to mention it,” he added.

But while a bright future appears to be in store for the Philippines, Ahmad admits the Philippine government has so much work to do. And if the Philippines wants to get the global attention it deserves, it must improve its airport and transport system.

“I’m looking at tourism, [PH has] a huge opportunity, the finest natural assets in the region. The challenge now, of course, is to how to get to each and every destination. [There must be] airport investment, reliable transport from A to B, and that in turn, generate employment…that’s a great opportunity,” Ahmad said.

Ahmad says untapped opportunities for the Philippines also include rural development. 

“If you have connections or infrastructure and transport systems, livelihoods will improve. People will be able to produce food not only for the Philippines but for export,” said Ahmad. - Yahoo News

 

 

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