MANILA, Philippines–The economy is expected to sustain its current pace of growth, drawing strength from optimistic consumers, a resurgent manufacturing sector, and a big-spending government.
Metropolitan Bank & Trust Co., one of the country’s largest lenders, said the Philippine economy would likely shrug off risks, particularly the likely return of Europe to a recession, a slowing Chinese market and a looming domestic power crisis.
In a note to clients, Metrobank said it expects full-year average gross domestic product (GDP) growth to come in to at least 6 percent, amid expectations that construction activity would improve in the second half of the year as infrastructure spending picks up.
“Furthermore, the sustained double-digit growth in the manufacturing subsector is expected amid the strong domestic demand,” it said.
Growth in the manufacturing sector would be fueled by stronger demand for the country’s exports as economies of major trading partners improve.
Latest government data showed the country exported 10.5 percent more in August of this year over the same period in 2013. This expansion was driven by the electronics sector, which accounts for more than four-tenths of the goods sold by local firms overseas.
The bank’s forecast falls short of the government’s target of a growth of 6.5 to 7.5 percent this year. With the first semester’s growth at 6 percent, the economy would have to grow by at least 6.9 percent in the July to December period for the low-end of the state goal to be reached.
Last year, the Philippine economy was Southeast Asia’s fastest-expanding, having grown by 7.2 percent.
Both the International Monetary Fund and the World Bank expect the Philippines to fall short of its goal this year, although administration officials remain confident that the target can be hit.
In the coming year, Metrobank said the country could get a boost from higher public investments ahead of the 2016 presidential elections.