Foreign banks upgrade PH growth forecasts

Citi, HSBC cite country’s solid economic fundamentals

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Two of the foreign banks with the largest operations in the Philippines upgraded their economic growth forecasts for 2013 after the country beat market expectations and outperformed the rest of its Southeast Asian peers in the second quarter.

American banking giant Citigroup revised its 2013 gross domestic product (GDP) growth forecast to 7.3 percent from 7 percent previously while the outlook for 2014 growth was also adjusted to 6.9 percent from 6.8 percent, based on the latest research written by Citi economist for the Philippines Jun Trinidad.

In a separate report, British banking giant HSBC jacked up its 2013 GDP forecast to 7.1 percent from 6.4 percent, with Hong      Kong-based economist Trinh Nguyen expecting a recovery in global demand to boost exports and remittances in the fourth quarter.

“The Philippines remains one of the world’s economic bright spots,” Nguyen said in a research note issued after news that the Philippine GDP grew by 7.5 percent in the second quarter, making it the fastest-growing economy in Southeast Asia and matching China’s pace of growth.

The HSBC economist said the growth data released Thursday had shown that the momentum was strong despite a drag from net exports, thanks to robust investment spending and private consumption.

“A recent improvement in fiscal and monetary policy management has reduced the external debt burden, contained inflation and created more scope to support growth. In addition, the savings made thus far will make space for much-needed infrastructure spending, allowing the country to take advantage of its favorable demographic transition,” Nguyen said.

“The Philippines has been caught in the rush as investors exit emerging markets. But in our view it should not be lumped together with economies which are overly reliant on foreign funding to support the current account deficit and growth. The current account and the balance of payments are in surplus and we expect this trend to continue over the next two years,” she added.

Trinidad, for his part, said that following the first-half growth of 7.6 percent, Citi was expecting “slower but still strong” growth of 7 percent for the second half of the year.

“Base effects, modest export gains in the fourth quarter 2013, financial volatility due to (US Federal Reserve) taper risk, which could impact investments and delayed PPP (public-private partnership-funded infrastructure projects) all assure us of upbeat but less robust growth,” Trinidad said.

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  • mojo76

    Setting aside pork barrel this is good news for our country…..lets move on

  • I_am_a_citizen_of_the_world

    Keep it up and keep corruption away. Slowly and surely we will get there on top!

  • Prouder than ever 2B Filipino

    thank you to the administration for this consistent performance. May God give you further strength and vision to make the country at its best.

    maraming salamat din sa dumaraming positve minded Filipinos.

    I am prouder than ever to be Filipino! Despite the calamities, the criminals in the government system, the poor who have become like pests, the non-Filipino idealisms being pushed by our lost brothers, we can still afford to move forward. Just think about if we don’t have these negative forces in the system.

    better to be positive. it is what the country needs.

    …the Filipino spirit is indomitable. let us persevere for our country…Mahalin natin ang ating Pilipinas ng buong giliw…

  • Bayang_magiliw

    Hindi na naman makakatulog ang CBCP (Catholic Bishops and CRABs of the Philippines). Introducing!!!!! Tagle et al, Leonor “loser” Briones, Amando Doro-gista (comedy section writer dito sa PDI), Noli De-Cashtro na ginagamit ang programa nya para sa mga negative propaganda, Anthony Taberna ang media attack dog ng INC at Toby “Adik” Tiangco!!!

    • titolim

      baka ok sa kanila ang nakaraan administration, at hindi nila matanggap ang nangyayari sa business climate ngayon at gugustuhin panila siguro ngayon na sumarorot ang ikonomiya ng bansa kaysa umakyat.

  • Batala

    Thank you very much for all Filipinos who have contributed to this positive rating by foreign banks.

    To all negative people please just COUNT OUR BLESSINGS AS A NATION! ;)

  • just_the_guy

    The critics of the current administration will never accept this as positive. Bukas na bukas lang, may ilalabas na naman silang pang-kontrang balita. Ngayon palang isini-siksik na naman ang isyu ng “trickle down effect.”

  • rodben

    Without OFW’s money send home to buy foods in tables, to send their childrens in a good school, going shopping in any malls, going pinic in any reasorts, buy home in any law cost or middle class subdivisions and without the corrupt politicians money economy will not lift-up… because manufacturing exports is very low compared to Vietnam , Thailand, Malaysia, China and even to the smallest island Singapore…

    • Handiong

      The usual broken record of senseless criticism. What do you know about the countries you mentioned? You can’t even write straight English. You’re parroting something you read somewhere.

    • Diablo_III

      troll warlord..

    • jane jane

      What you said is partly true. But we’ll get there. We’ll get there.

      We just got out from the septic tank, so to speak, courtesy of the past several administrations.

      Aren’t you glad we have good news at least to enjoy with?

      Just do your part—-don’t align yourself with the corrupt out there.

    • Mazza02

      It is very easy to verify that your statement is not factual. A quick google will avail you of verifiable data attesting and
      itemising the main components of the growth – that refers to what caused
      the growth for the non filipinos like you.

      Services Sector (7.3%),
      Manufacturing (10.3%) and Construction (17.4%) were the major supply
      side drivers including improved agriculture and exports in general. The
      main demand side contributors are consumer spending (meaning people have
      money to spend so not poor as you say), government spending (refers to
      PPP infrastructure projects also major reason for other countries
      especially your country China) and increased investments in Fixed
      Capital i.e. refers to FDI. Net Factor Income from abroad only grew
      2.7%.

      It is clearly apparent that the growth in Philippines is due to
      meaningful structural economic changes, which is all the more surprising
      as it is achieved amidst the most challenging external economic
      environment the country has faced since WW2.

  • Ros Feliciano

    Hmmm, for as long as it does not trickle down to poor to uplift their standard of living, it means less meaningful to the people.

    • Handiong

      To every graduate who is hired for a job, and there are hundreds, if not thousands, of jobs being filled every day, it is very meaningful.

    • jane jane

      It’s by choice. Many Filipinos just want to be poor. It seems like being poor is their comfort zone.

  • Mazza02

    Good news!! Others are recognising positive changes and strides made so far will help attract more business.

    • Chrisnadal19

      buti pa foreigners meron optimism ndi kagaya sa ibang Juan tamad komentaristas, rekalamador at wlang magawa sa buhay.

      • Handiong

        The “Juan tamad komentaristas” must understand that these analysts have big professional reputations to uphold, even among their peers, and they cannot just go out with assessments without solid bases.

      • Batala

        Yes very well said, these foreign banks are professionals and HAVE BEEN VERY STRAIGHTFORWARD about problems.

        They even have been very straightforward about bad news regarding the problems within the USA economy.

        If there is smoke there is fire, but if there is just one ray of sunshine, we know for sure the sun is up there.

      • Handiong

        Atta, boy!

      • just_the_guy

        The “Juan Tamad komentaristas” will never understand his. They will refuse to understand this. What they’ll do instead is to maintain their negativity and try to drag us all down.

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