Investments trickling into PH, says Citi


The Philippines, which mainly depends on consumer spending for growth, is said to have entered the early stages of becoming an investment-driven economy.

This was the assessment made by international financial services firm Citi, which said in a recent paper that the combination of robust economic growth and benign inflation in 2012 indicated that investments had started to play a more significant role in driving the economy.

Citi said the Philippines last year registered a “positive output gap,” a phenomenon in which investments and production within an economy exceed previous levels.

Should this persist in 2013, Citi said, the Philippines would enjoy robust economic growth without the baggage of faster inflation.

This is because higher investments, which boost supply of goods and services, tend to temper the increase in consumer prices.

The Philippines is thus expected to stay in the so-called sweet spot—a point where economic growth is high and inflation is modest.

“Clearly, this interpretation of a positive output gap suggests [that] investment-driven growth, if it persists, would not be inflationary,” Citi said in the paper authored by economist Jun Trinidad and titled “Philippine Macro View: Laying the Foundation for Investment-Driven Growth.”

The latest government report on the economy showed that the Philippines grew year on year by 7.1 percent in the third quarter of 2012, and by an average of 6.5 percent in the first three quarters of the year. This made the country one of the fastest-growing economies in Asia.—Michelle V. Remo

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Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

  • Melvin

    Sabi ko na nga ba e, mas magaling ang estudyante kaysa kanyang propesora. Magaling kung sa magaling yung propesora, kaya lang sukat bang mangako ng enchanted kingdom para sa ating bansa. Tila sumobra naman yata ang galing sa pagsisinungaling. Pero in fairness yumaman din naman siya ng todo-todo. Yun ba naman mangurakot ka ng walang preno. Kaya ayun siya ngayon nagdurusa sa enchanted kingdom ng VMMC at may sandamakmak pang kinakaharap na kaso…

  • Diablo_III

    Patay ang mga crablets dito…

  • Chris

    I think 2013 will be the the start of inclusive growth.More of my friends have resigned last December and another wave this January.Guess what! They have finding more job options nowadays.The job they left will be filled with newbies.Very promising.I might follow this 2013 to concentrate on my sideline which has grown 3.5X my salary.Hephep! Hurray!

  • paul

    naku. masamang blita ito sa mga haters ni pinoy……

  • rayingga

     Good luck Philippines

  • yesyesyo

    Consumer spending means consumers have the power to spend. Better than nothing to spend.

    Keep spending!!

  • rodben

    The Philippines depends on consumers spending for growth. Philippines is World’s WORKERS exporter.

    • Handiong


      • Diablo_III


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