Philippines faces bright prospects for 2013

Citi, HSBC raise growth forecasts for 2012

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A road-widening project of the Department of Public Works and Highways in San Fernando, La Union. The Philippines continued to generate positive economic forecasts from foreign institutions following a surprise third-quarter growth. PHOTO FROM DPWH.GOV.PH

The Philippines continued to generate positive economic forecasts from foreign institutions following a surprise third-quarter growth.

For this year, Citigroup raised its gross domestic product (GDP) growth forecast to 6.3 percent from 5 percent and to 6.1 percent from 5.3 percent in 2013, citing accelerated government spending and stable domestic demand.

British bank HSBC also revised its 2012 forecast to 6.2 percent from 5.7 percent although for 2013, the forecast was pared down to 4.9 percent from 5.7 percent given the continuing external headwinds.

Both Citi and HSBC expected the Bangko Sentral ng Pilipinas to keep its key interest rates on hold at 3.5 percent for the next policy rate-setting.

Minda Olonan, head of Philippine equity research at Citi, said the Philippines would benefit from more pronounced growth drivers such as excise tax reforms, accelerated bidding of key public-private partnership (PPP) projects and a credit-rating upgrade. She said public infrastructure could be the medium-term “game changer.”

“Better fiscal health is enabling the government to be more proactive in stimulating the economy. Aside from the PPP infrastructure agenda, the government is embarking on a P325-billion multi-year flood works and drainage program, a spending that is larger than the P233-billion cost of the PPP projects. We believe this may lift the country’s investment/GDP ratio that will eventually accelerate economic growth,” she said in a Dec. 7 research.

Citi believes that banks, property, consumer, utilities and conglomerates will benefit from the investment spending dividend. The bank’s top picks on a 12-month view are Ayala Land, SM Investments, Philippine Long Distance Telephone Co., Ayala Corp. and Puregold Price Club Inc.

HSBC economist Trinh Nguyen said a major force behind this year’s growth has been the country’s strong institutions, specially the BSP.

“Monetary officials have alleviated price pressures by successfully sterilizing capital inflows to contain money supply growth. Closely monitoring rice supply as well as bolstering food sufficiency policy has also helped,” she said.

“A slowdown of inflation to 2.8 percent year on year in November in spite of accelerating growth reflects the institution’s sound management of the economy,” Nguyen said, adding that benign inflation has given monetary officials the space to cut rates by 100 basis points in 2012.

But Nguyen said the BSP was not the only champion behind the country’s strong performance. “President Aquino’s efforts to increase efficiency of fiscal spending and revenue collection gave the government the room necessary to counter-balance the global slump with increased expenditure. A look at the breakdown of growth shows that private consumption, government spending and investment have contributed to growth thus far in 2012,” she said.

While external headwinds persist and likely drag down the Philippines’ electronics exports, HSBC expects growth to remain robust in 2013 on the back of strong fiscal spending, low interest rates and resilient remittances.

She said monetary officials would likely hold rates at the next meeting to assess the impact of the recent acceleration in growth as well as the 100-basis-point cut so far this year. “Inflation will likely be benign in first half of 2013, thanks to contained food and oil prices, allowing the BSP to support growth,” she said. “Though external conditions remain weak, strong domestic demand will keep the BSP vigilant and hold rates.”

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

  • Charles Solee

    Most people don’t feel the effects of the good things happening on our economy. INVESTORS like us feel it though. Learn to invest in mutual funds, UITFs, or stock market. You can invest as low as Php 5k.

  • ProudPinoyinLosAngeles

    God bless the Philippines and the Filipino people! Kudos to Pnoy and his economic managers and congratulations to everyone who is doing his/her part for a brighter Philippines! To all the negative “crabs” out there, you should be ashamed of yourself for trying to malign the good things that are happening in our country. We should all be patient! We have suffered for decades, change doesn’t happen overnight! Nonetheless, it has begun! Glory be to God! Mabuhay ang Pilipinas!

  • http://profile.yahoo.com/UZF4OTGY4BREFE42RXP7FZJKFY Ding

    Unti-Unit na’ng naku-kontrol ang mga magnanakaw sa gobyerno… salamat TUWID NA DAAN!

    With further relevance to this news item, PDI issue of today has “PCCI SEES HIGH ECONOMIC GROWTH STARTING 2014″…'”by ‘more than 7%”, with 2013 as “the year to prepare to become more competitive”.

    Hindi makakayang sirain ng mga natitirang bayarang anay ng mga magnanakaw sa gobyerno ang determinasyon ng kasalukuyang administrasyon for better and honest governance.

    FORWARD PHILIPPINES !

  • http://pulse.yahoo.com/_5STEU22AD7YRHQSB6RE56ZDSYA J

    http // globalnation inquirer net/59379/chinas-mining-occupation-of-the-philippines#comment-733963225
    Brighter PH if govt act fast to stop the minerals smugglers and mining companies that plundering PH natural resources. Dapat Pinoy ang makinabang sa yaman ng bansa at hindi mga dayuhan tulad ng mga intsik.

  • Valentino Paredes

    Bright prospects, but no bright reality. Except that politicians will pump billions of tax money into election, a real bright prospect.

    • ProudPinoyinLosAngeles

      Seriously Mr. Paredes??? You know what I think, your ignorant analysis and pessimistic way of thinking is what we call poison to the country. As long as there are people like you then our beloved country will remain in the shackles of poverty! Thank God, Not everybody thinks the way you do!

  • http://www.facebook.com/profile.php?id=1300139006 Arjane Sachi Lolong

    isn’t this year good because its going to be election soon? Hahaha

    • http://pulse.yahoo.com/_WC2VPZRJETRO5KOU4VOZCJXEDY Tamarindwalk

       They already are over-valuing the peso so that the politicos can rake them in from bribes, errr “contributions”, and then they buy dollars cheap and salt the money abroad.
      It’s the same, old racket.

  • http://www.facebook.com/aldin.rrt Al Calde

    Zzzz. Sorry nakatulog ako..
    Maganda daw ang economiya ng pilipinas sa 2013?
    Please don’t wake me up….

    • http://profile.yahoo.com/UZF4OTGY4BREFE42RXP7FZJKFY Ding

      Matulog ka na lang, mas pakikinabangan ka ng bayan sa ganyan…kaysa gumising at manira.

      • http://www.facebook.com/aldin.rrt Al Calde

        mas mabuti naman yon kaysa gising at nakatunganga, its called procastination.

  • ExpatSteve

    Nothing much happening with PPP except talk, Mindanao agriculture in shambles and power turned off in entire province of Abra. Doesn’t look so good to me.

    • 1voxPopuli

      there’s a province called Abra?

      certainly nothing is happening up there.

      • ExpatSteve

        Abra has a large area, small population but still it is a province and it is a sorry state of affairs when they turn off the electricity in the entire province any place and the central government does nothing.

    • http://pulse.yahoo.com/_WC2VPZRJETRO5KOU4VOZCJXEDY Tamarindwalk

       And the airport still is falling apart with no plan to rebuild it or move over to NAIA 3.  Who wants to come here to see the mess at NAIA I and the overcrowding at NAIA 2.

      • ExpatSteve

        Terminal 3 is supposedly a seismic hazard and should not even be used and needs a major seismic retrofit (Cost P212 million). DOTC/MIAA bid this project August 23 and apparently selected a contractor. No work started yet. Same for Terminal 1, work is 1 year behind. The Japanese Contractor for Terminal 3 is supposed to install 23 systems, again, no obvious progress. All talk, no walk as they say.

      • Bring back Phils Glory. Unite.

        bad news. i am very particular about airports. 

  • http://profile.yahoo.com/GHH2IPW7ZSTQX4JCYQWL2BLXOE MarcialA

    kailan kaya ang average per capita income aabot ng 50,000 pesos per month

    • http://pulse.yahoo.com/_TJ2TJXPNBDRDQCG3A223KYFGYA michael

      50k is just over 1000 dollars, the gdp per capita of the Phil is already way above that as it is, its already on the. $ 3k mark

      • http://profile.yahoo.com/GHH2IPW7ZSTQX4JCYQWL2BLXOE MarcialA

        halimbawa mag kano na average sweldo ng sales lady ngayon sa mga mall.wala pa cguro 10 tausan.un ibig kong sabihin ng average per capita income.kung 50 tausan na sweldo per month ng sales lady uwi na ku sa pinas.for me per capita income ay mas importante second lang sakin ang gross domestic product coz this does not reflex individual income like per capita income.

      • Valentino Paredes

        Nice statistics, probably again including the remittances.

  • http://pulse.yahoo.com/_MLURGONF7ZBJY7V2RJ4PEJIEHU Filipinos

    self-serving. tumataas pa rin presyo ng mga bilihin, pamasahe, tuition. bumababa ang sweldo. ang trabahong sinasabi ay mga below minimum wage. sa nasaan ang bright prospect dyan? ,aliban sa prospect ng mas malaking makurakot dahil sa lumalaki ang remittances ng mga OFW?

    • Aris Piccard

      Antay antay lang tayo. Kc nde naman magic yan na biglaan mong mararamdaman. Sana tuloytuloy na yan paglago ng ikonomiya ng bansa. Try mo kaya kumayod ng mabuti at mag invest sa stocks. Para pag sinabeng  malakas ang PSEi may nakikitang kang numero sa portfolio mo na tumataas din.. Magtulongan nlng tau at ipagdasal ang mga kurakot na nasa gobyerno na sana makonsensya sila. Kc sila ang isa sa dahilan kung bkit tau padin ay mahirap. 

      • Jeanne Thompson

        Tama ka! Tigilan na ang dada bagkus gugulin ang oras sa paggawa :)

        Nag invest ka din pala sa stocks. Hehehe, ako din. Malapit na ngang magceiling yung isa hehehe. 

      • http://twitter.com/aswang29 aswang29

        ang problema kasi sa ating mga pinoy lahat asa sa gobyerno…eh cno ba ang gobyerno kundi tayo….kung mag invest ka para sa sarili mo eh di sana mganda ang kinabukasan mo..ang dami at affordable ngaun ang mga investment vehicle.kung ang maid ni Bo Sanchez nkapg invest sa stock market, tayo p kaya?isip isip mga mhal kung kbabayan…wag natin iasa ang kinabukasan natin sa ibang tao…tayo mismo ang gagawa nito

      • http://profile.yahoo.com/UZF4OTGY4BREFE42RXP7FZJKFY Ding

        Gusto ko ang comments at mentality mo…
        Di ka dapat aswang, dapat sa ‘yo anghel.

    • Diablo_III

      Ano to abracadabra ses bomba..hahaha. 

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