BSP bullish on GDP growth

The Philippine economy will likely sustain or even surpass its first semester growth until the end of 2013, buoyed by positive business and consumer sentiment that has resulted in industrial production and consumer consumption.

Most of the economic indicators tracked by the Bangko Sentral ng Pilipinas (BSP) pointed to signs that the country’s growth for the year would likely breach official government targets.

“The safe way to say it is that we will be close to 6 to 7 percent. After all, we already did over 7.5 percent in the first half,” BSP Deputy Governor Diwa C. Guinigundo said late last week.

“If you look at the overall economic growth, it may even be higher than what we have today,” he added.

The Philippine economy, as measured by gross domestic product (GDP), grew by 7.6 percent in the first half of 2013, surpassing China’s performance in the same period.

The Philippines was also the fastest-growing economy in Southeast Asia.

At a press briefing last week, Guinigundo said seven of the 11 economic indicators tracked by the central bank showed that growth may have continued to accelerate in the second half of the year.

These positive indicators were results of the BSP’s quarterly Business Expectations and Consumer Expectations surveys, total orderbook index for businesses, book-to-bill ratios of local firms, commercial electricity consumption, average price-to-earnings ratios of publicly listed firms, employment, and the volume of production index for manufacturers.

These measures outweighed the signs of a slowing economy as shown by the country’s below-target inflation rate, the value of publicly listed shares, and low exports and imports numbers.

Guinigundo said the National Statistics Coordinating Board (NSCB) follows a similar method in projecting growth. Indicators tracked by the NSCB include hotel occupancy, the number of new businesses in the country, merchandise imports, tourist arrivals, domestic liquidity, and power consumption.

He said the NSCB was just as optimistic, with eight of its 12 economic indicators pointing to faster growth in the second half of the year.

Given these signs, Guinigundo said it would be highly improbable for the Philippine economy to grow below the government’s target range for the year.

“We already built up that capital in the first half. Even if there is a sharp deceleration, we will still fall within the target range,” Guinigundo said.