PH seen to defy slowdown

The Philippines, considered to be Asia’s fastest-growing economy, may buck the growth downtrend seen for most developing countries in 2013, according to international think tank Oxford Analytica.

The Philippines may be one of the few countries to register growth faster than that reported in 2012 despite the lingering uncertainties in the global economy, Oxford Analytica said.

It described the Philippines, along with a few others, to be a “notable exception,” as growth of most emerging markets are likely to decelerate this year.

Average growth in 2013 looks set to be “lower than the 2012 rate of just below 5 percent, with few hot spots visible,” the think tank said in a report on economic growth projections.

The expansion rates of developing countries have been dampened this year by external problems, led by fiscal problems in the United States and relatively weak demand from Europe that could dampen exports revenues, it explained.

The expected tapering of the US Federal Reserve’s Quantitative Easing (QE) program also will adversely affect emerging markets.

“Recovering growth momentum may be a slow process, especially for those countries in need of capital inflows to boost funds for investment,” Oxford Analytica said.

The think tank’s projection for the Philippines bolstered claims of the government that the country’s favorable macroeconomic fundamentals would ease the effects of adverse economic developments abroad.

Arsenio Balisacan, director general of the National Economic and Development Authority, earlier explained that the country’s benign inflation would serve to attract more investments to the country.

Also, the country’s manageable budget deficit, would allow the government to pump-prime the economy if needed, Balisacan added.

Rising foreign exchange reserves may also make the peso less vulnerable to external shocks.

The Philippine economy expanded by 7.5 percent in the second quarter of the year, and an average of 7.6 percent in the first semester.

This made the country the fastest-growing economy in Asia, apart from China.

The growth rate this year was attributed to higher government spending on infrastructure, rising investments in the manufacturing sector, and household consumption.

But economists said that the Philippines continues to be saddled with the problem of “non-inclusive growth.”

The benefits of an expanding economy have yet to result in substantial poverty reduction, they explained.

An economic growth rate of at least 7 percent should be sustained over the long term so that the country can effectively reduce poverty incidence, the economists said.

The poverty rate in the country stood at 27.9 percent in the first semester of 2012, said to be one of the highest in Asia.