IMF raises growth forecast for PH

One of few bright spots in global economy

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The Philippines remains one of the few bright spots in the global economy, with domestic demand fueled by remittances from migrant workers and increased government spending expected to offset the slowdown in the developed world.

 

The International Monetary Fund (IMF) on Wednesday announced that it now sees the Philippine economy growing by 7 percent, better than the previous forecast of 6 percent.

 

The new forecast is in line with the top end of the government’s own target range of 6-7 percent for gross domestic product (GDP) growth for the year. The better outlook for the Philippines was announced following the release of new forecasts for the global economy and other Southeast Asian markets, which are now all expected to grow at a slower pace.

 

“The Philippines is really the outlier,” said Shanaka Peiris, IMF’s resident representative for the country.

 

In a briefing with reporters, Peiris noted that the Philippine economy relied heavily on domestic demand rather than export revenues that fuel the economies of neighbors like Malaysia, Thailand and Singapore. This showed that the country was one of the few emerging markets that could “better cope” with current global economic conditions.

 

In 2014, the forecast was also raised to a growth of 6 percent from the previous 5.5 percent.

 

“The Philippines has more growth momentum than the rest of the world,” Peiris said, citing the recent increase in government spending in the first half of the year.

 

Remittances from overseas Filipino workers (OFWs), which the IMF expects to grow by 5 percent this year, also remain stable, fueling domestic demand.

 

OFW remittances are expected to reach $22.5 billion this year. Remittances from the country’s 10 million migrant workers are the Philippines’ biggest source of foreign exchange, which protects the economy from any sudden shortage of cash from overseas.

 

In the latest update to its World Economic Outlook (WEO), the IMF said the global economy would grow by just 3.1 percent in 2013 and 3.8 percent in 2014, from the previous 3.3 percent and 4 percent.

 

The growth forecast for the Association of Southeast Asian Nations (Asean)-5 cluster—made up of Indonesia, Malaysia, Philippines, Thailand and Vietnam—was also reduced to 5.6 percent and 5.7 percent in 2013 and 2014, respectively. The previous forecast saw the region growing 5.9 percent and 5.5 percent for 2013 and 2014.

 

The lower forecast for the global economy and emerging markets was a result of “appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area.”

 

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  • Descarte5E

    Translated: Maganda pautangin ang Pilipinas, may OFW remittances at medyo sigurado makafulfill ng obligasyon. Eh Alam na alam ng IMF na habit ng Pilipinas ang mangutang.

  • RJ Legaspi

    I’m glad that the Philippines is progressing. The progress might not be too obvious now but somehow we are becoming much better economically. Progress doesn’t happen overnight, it takes years of sustain growth and development. Even the most developed countries took a long a time to be progressive.

    As Theodore Roosevelt said “Believe we can and we are half way there”. The other half is to act upon on what we believe we can.

    Negativity will get you nowhere.

  • Ako_Hiking

    Sadly for the Aquino Administration all the upgrades and credit ratings that the Philippine economy has been receiving has been attributed to the work done by the previous Administration under Gloria. At least that is what Fitch stated when they gave the Philippines it’s first economic ratings upgrade.

    • Tommy

      Nope.

      Just reread it, and they certainly give both administrations credit.

      Try again, and this time rely on facts instead of your petty little biases.

      • Ako_Hiking

        Oh so you admit that Gloria’s Administration was given credit for the fiscal management and reforms that she initiated during her term? All Aquino was given credit for was for continuing…again which is good certainly Gloria deserves a big chunk of credit.

      • Tommy

        I’ve never denied that GMA deserves some of the credit for the current state of the market. I think she’s a despicable, corrupt, little troll, but some of the reforms she made helped get us to where we are today.

        However, denying that the current administration has anything to do with the upgrades and such, and pretending all the credit should go to GMA, is absolutely ridiculous. The economy didn’t boom under GMA for a reason, and the investment climate simply wasn’t as good back then.

        Both deserve credit, simple as.

      • Ako_Hiking

        The problem with GMA was not corruption and work ethic and achievements it was communication. While her detractors continued to create a black propaganda against she ignored them and continued to work to ensure that once she steps down from office the PH economy would continue to strive…and that is exactly what is happening to this day.

      • Tommy

        Honestly, if it wasn’t blatantly clear to you that GMA was corrupt, there really isn’t any point in trying to convince you, as that’s probably impossible.

        And it’s not like there aren’t people creating black propaganda against P-Noy, as you well know.

      • Ako_Hiking

        There is corruption in any Administration whether you would like to believe it or not. It was like that during GMA’s years and like that now under President Aquino. Now to call Aquino corrupt is going a bit far..similarly calling GMA corrupt is also going a bit far. Certainly she was raised by parents who stood for incorruptibility and definitely raised her that way.

      • Tommy

        I haven’t been calling Aquino corrupt.

        There is corruption in his administration (as would be expected after decades of the same), but my all accounts he himself has not been involved.

        I HAVE been calling GMA corrupt, and considering everything we’ve learned, and how she conducted herself in office, and who she surrounded herself with, it is a reasonable assumption.

      • Ako_Hiking

        Aquino has been the one who has appointed all his Cabinet members and people in his Administration…how can you not say that he too surrounds himself with some corruption. He did appoint Padaca to the Comelec as well Lanto, although the latter’s appointment failed. And how about Lacson being part of Aquino’s Cabinet too?

      • Tommy

        Mostly because running a government is a huge task which requires thousands of people. You can pick the best people you can, but you can´t personally know everybody, and be 100% sure they aré clean. Also, corruption is so entrenched in the bureaucracy (thanks to the likes of GMA) that getting it out in 6 years is near impossible.

        Then there´s the fact that Binay is part of the government,which I hope we aren´t blaming PNoy for. Then there are certain members of senate the less said about the better.

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