Foreigners upgrade outlook on PH

Bangko Sentral seen to keep rates unchanged


Christmas lights sparkle from construction tower cranes in Bonifacio Global City, Taguig. With the upcoming holiday spending and the budget secretary predicting the start of election-related spending in the fourth quarter, more international institutions have upgraded their full-year GDP forecasts for the Philippines. PHOTO BY ARNOLD ALMACEN

After a surprising 7.1-percent third-quarter economic growth, more international institutions have upgraded their economic outlook on the Philippines to factor in a stronger-than-expected economic momentum.

In a research note, ING Philippines economist Joey Cuyegkeng said growth in the fourth quarter would likely be higher at 6 percent compared to an earlier expectation of 5.6 percent, bringing full-year growth to 6.3 percent. ING was previously expecting a full-year 2012 growth of only 5.9 percent for the Philippines.

London-based think tank Capital Economics also expected the Philippine economy to expand by 6.3 percent this year, upgrading its outlook from the previous forecast of 5 percent. “Reflecting the economy’s resilience this year, we are also raising our growth forecast for 2013 to 4.5 percent, up from 4 percent previously,” Capital Economics said, adding, though, that its outlook for next year was still below the consensus forecast for growth in 2013, which was 5.25 percent ahead of the recent third-quarter data.

For the first three quarters, the country’s gross domestic product grew by 6.5 percent, much stronger than 3.9 percent in the same period last year.

“With upcoming holiday spending and the budget secretary predicting the start of election-related spending in the fourth quarter, full-year GDP looks set to exceed the upper end of the government’s 5-6 percent target,” said New York-based think tank Global Source.

The Global Source research said the economy’s stronger growth, which pushed domestic output further above trend, would likely be “an important consideration as monetary authorities weigh inflation risks and decide on the policy rate in its next meeting on December 13.”

ING’s Cuyegkeng said the third-quarter growth might have erased any chance of a fresh interest rate cut by the Bangko Sentral ng Pilipinas in its next meeting this month. “But watch for some macro-prudential limits from BSP to affect cross-border flows,” he said.

Citing BSP Governor Amando Tetangco Jr.’s speech at a recent forum, he said it was reiterated that cross-border inflows were making monetary policy-making challenging. It was noted that the IMF was expecting about $112 billion in inflows to Asia this year and $182 billion in 2013.

“Hot money” inflows are seen remaining huge next year as the external environment is stabilizing—also an assessment among central bankers that cross-border inflows were coming not just from banks but from corporations.

The BSP is focused on the financial stability that cross-border flows might affect, including threats of asset bubbles, according to Cuyegkeng. “The BSP has a deep tool kit to deal with cross-border inflows. The tool kit includes macro-prudential tools—some of these have been deployed to include prohibition of offshore funds into SDAs [special deposit accounts] and higher capitalization requirements for NDFs [non-deliverable forwards],” the economist said.

Capital Economics said the big challenge for the government would be to sustain a strong investment. “Recent improvements in the country’s business environment as well as an ongoing clampdown on corruption bode well for the future. Moreover, after a slow start, there are promising signs that the government is starting to make decent progress on a series of public-private partnership projects, which should help improve the country’s dilapidated infrastructure and become a driver of growth in the coming years,” the research said.

But the major downside risk comes from abroad, the London-based think tank said.

For the third quarter, exports of goods and services slowed but were still up by 6.9 percent year on year. “This was considerably better than most countries in the region managed last quarter. But with the global economy likely to disappoint in 2013, we still expect the country’s consumer-focused exporters to struggle over the next year,” Capital Economics said.

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  • rodben

    Kabayan pag Pinoy kasi ang may-ari ng negusyo kinukutungan pagdinagbigay pipirwesyuhin mabuti kong malaki ang puhunan e ok lang.. samantalang mga intsek protektado di mo nga alam kong nagbabayad sila ng tamang buwis, di tulad sa ibang bansa mga negusyanting Pinoy  maganda ang kita dahil parehas ang gobyerno doon.

  • akosimickeymouse

    Mga kabayan mamuhunan na sa pilipinas para umangat pa ng husto ang ating ekonomiya….limitahan natin ang mga materyal na mga bagay, nabubulok lang nman eto…sana ang gobyerno ay magsagawa ng pagtuturo tungkol sa financial education…sana isali na eto sa pagtuturo sa mga paaralan mula elementraya at highschool….Nakikita ko kasi sa mga intsik kahit hindi nakatapos pero nagpapatakbo ng negosyo mas lamang pa sila sa mga professional….sila pa ang may-ari sa mga negosyo, ang pinoy na professional ay hanggang empleyado lang sa intsik na wala man lang natapos….para sa may mga pundo at sa mga ofw mag-invest na kayo…kung hindi tayo mamuhunan sa ating bansa maghahari ang mga insektong negosyante dito sa ating bansa….Ibahin na natin ang sitwasyon….hindi pwedeng hanggang utusan na lang tayo parati sa mga suwapang na mga negosyanteng intsik…..

    • Sal


  • lagalag

    Buti pa ung mga dayo (foreigner) naniniwala sa pag unlad ng bansa pero un mga Filipino nandun pa rin ung UTAK TALANGKA.

    Ang pag unlad ng Pilipinas ay nasa ating gawa at paniniwala.

    Tigilan ang siraan naway magtulong tulong sa kaunlaran. Ang hindi masayang namumuhay sa Pilipinas ay may kalayaang umalis ng bansa at humanap ng kanyang ikaliligaya.


  • rodben

    Marami pa sigurong pag-aari ang gobyerno na pweding ibinta para makalikom pa ng malaking pera HAYAAN NYO NA ANG MGA MAHIHIRAP NA LALONG MAGDUSA SA TAAS NG MGA PANGUNAHING SERBISYO..

  • oh_noh

    kumokoletka lang sa exchange rate ang gobyerno!!! *bravo*

  • dante

    Our country deserves these developments, because we worked hard for it.    These opportunities just waited for Gloria Arroyo to step down before its sets in.  Never again can we allow this type of leaders to lead this country.  All she did was to fan patronage politics and bribe local and national officials just to keep her ‘unpopular government’ to stay in power.


    i’m not being negative here.. in fact, i am thankful kay Noynoy because I am earning 20+% sa stock market… and i will continue to invest sa stock market until Noynoy’s term ends or when i earn 50%, whichever comes first.. kaya lang i am only investing 70% of my assets in Philippine stocks.. the rest in the US stock exchange… pero kung si Binay ang magiging presidente, i will bet 100% on stocks and isasanla ko pa bahay namin to bet all of it sa PH stock market.

    • Sal

       bakit naman sa term ni binay?

  • kwapong654

    Nakakatawa talaga itong mga bayaran ni gloria. ha ha ha inggit lang kayo at mabubulok na amo niyo

  • Chris

    expect strong growth again next year.. it’s the elections.

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