Higher growth trend seen for PH


Goldman Sachs expects the Philippine economy to move to a higher growth trend while the peso will continue to gain strength.

The global investment bank said the local currency could strengthen to 37.50 against the US dollar in the next 12 months.

Over the medium-term, or through 2016, the Philippines can grow its gross domestic product by 5.5 to 6 percent a year as the Singapore unit of the investment bank maintains a rosy outlook for Southeast Asia, said Mark Tan, a Goldman Sachs economist for the region.

“It’s a very interesting time to be here. There’s immense interest on the Philippines in the last 12 to 18 months—more so than I can remember over the last 10 years that I’ve been involved in Philippine research,” Tan said in a press briefing.

He said Asean’s growth path was brought on by several factors: Strong credit acceleration which, in turn, supported domestic demand; improved global demand; the top-down infrastructure programs of various governments; and the “relatively loose” monetary policy that supported investment and consumption growth.

The medium-term growth trend projected by Goldman Sachs is better than the 4.9-percent annual growth seen during the nine-year Arroyo administration, but is lower than the Aquino government’s fighting target of 7 to 8 percent.

To attain a growth rate of 8 percent, Tan said the present government would have to step up its infrastructure programs. Growth is driven by factors such as labor productivity, accumulation of physical capital, and how these two factors—labor and capital—are utilized to produce economies of scale, he explained.

“These are the areas the government needs to focus on,” Tan said.

Apart from boosting physical capital, he added, the government must also turn its energies to upgrade skills, move up the value-added chain and invest in human capital.

Tan noted how some investors in developed markets were somewhat disappointed in the slow pace of infrastructure rollout in the Philippines.

“But compared to its peers, I won’t say the Philippines is doing any worse,” he said, explaining that investors expected things to improve and this, in turn, would enable the Philippine economy to outperform other markets.

Still, he said, Goldman Sachs’ portfolio strategists maintained an “underweight” rating on Philippine equities due to valuation concerns.

“It’s now one of the most expensive markets in the region,” Tan said.

Also, he said, Goldman Sachs derives its strong peso outlook from the expected growth in overseas remittances and investment flows.

Monetary authorities in the region, including those from the Philippines, will likely become more tolerant of a stronger local currency if this is driven by fundamentals, for instance stronger trade and investment flows, Tan said.

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  • observer_din

    to all PNOY haters, your saint Gloria already conceded that the philippines is now succeeding in its program to improve economy, time to attack your saint because she is now starting to become a yellow fan…

  • Moses

    hope all of us will unite to steer this ship forward. let us work together to bring this economic development down to the poor society. sana maalis na yang mga informal settlers and start living in condos. start educating our fellows in becoming responsible citizens of the republic. let’s work and improve. Mabuhay ka Pilipino!

  • jeronimo


  • Your_King

    So this shows something interesting…that GMA during her 9 years maintained stable growth. I’m sure that gave way for Aquino’s term to be able to continue what she started. What sucks is that Aquino is not doing anything new in order that the next Administration can build on something. He seems content on just continue the economic initiatives that the previous Administration had and not creating any new of his own.

    • Chris

      Oic.. meaning? it still GMA’s accomplishment? hahah. these GMA fanatics are real suckers. 

    • observer_din

      you saint already conceded, the growth your saying during your president DORROVO was not consistent. kung baga sa chart parang alon, kaya lang mas matagal ang curve sa baba..

    • Diablo_III

      so you mean, when someone succeded PNOY you still recognize that GMA prepared the way for the good economy and she still got the credit.. Are you a CLOWN or something? LOL

  • George Lapulapu

    ..all clear now.. forward…..

  • Felix

    The Philippine peso will continue its strengthening vs. dollar until the small dollar savers give up their dollar savings to the influence of big dollar keepers. The timing depends on the ability of the small dollar savers to hold on to their dollars.

  • upupperclassman

    Analyze each statement of this Goldman Sachs’ economist will show what he is saying amounted to nothing. He is just repeating what the local economists are saying.

    • Handiong

      It only shows that foreign and domestic economists are unanimous when it comes to the Philippines.

      Of course, the naysayers, whiners, and gripers will say that PNoy is such a great operator that he was able to recruit all these foreign and local economists into his grand propaganda machine. Not to mention those hard-nosed capitalists and political leaders in Davos. And not to forget the IMF, ADB, and those credit-rating agencies.

      • Chris

        I totally agree.. the naysayers are always naysayers.. puro nalang duda nsa isip nila.. wala naman silang basehan. Haha. If it’s only an influencing game, then why can’t we see any positive news from the developed nations? 

      • Diablo_III

        good observation…

    • observer_din

      its nothing to you,  because you only want to hear was the opposite, sad for you because your heart will bleed but you cannot twist the fact that the philippines achieved this growth under PNOY.

      • upupperclassman

        Your reply is even more pathetic. Nobody is down grading economic growth achieved by Pnoy. My remark was directed at Goldman Sachs for being opportunistic. People better watch out what shady deals that Goldman Sachs will be cooking in Philippines. GS is notorious worldwide.

  • FernandoBusi

    I wonder what deal GS is peddling to the Philippine Government. 

    I remember that this was the bank which helped an idiotic and desperate Greek government back in the early 2000’s to hide a great deal of debt through a currency swap. This is another reason for FoI bill we might wake up heavily indebted to Goldman Sachs one day if we don’t keep a close eye on the deals government makes. 

    • observer_din


      • FernandoBusi

        You do know thats what happened? Try to do some research, ok sana if we still have Lito Camacho as our Finance Secretary he’s sure to know and understand how investment bankers behave and think. Mar Roxas has some experience on this though he came from a botique operation a long time ago. 

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