The Philippines will remain one of the Asia Pacific region’s best performers in 2014 and 2015, as it has been in the previous two years, even as economic growth slows and falls short of government targets.
In a yearend note to investors, BDO Unibank, the country’s leading lender, said the local economy’s health remained intact, despite a sharp slowdown in state spending in 2014 that brought down headline growth numbers.
“Even with uncertainties from both the local and foreign fronts, the Philippines is still expected to perform well given a confluence of affirmative factors,” BDO chief market strategist Jonathan Ravelas said in his report.
For 2014, BDO said the Philippine economy likely expanded by 6.2 percent, implying a sharp pickup in the last quarter of the year. For January to September, growth averaged 5.8 percent. The projected expansion still falls short of the state target of at least 6.5 percent.
In 2015, growth will improve marginally to 6.5 percent on the back of robust private consumption and hopes of increased government spending. Again, this is lower than the official state goal of at least a 7-percent expansion next year.
The Philippine economy has been one of the best performers in Asia in 2012 and 2013. In 2012, the economy grew by 6.8 percent, followed by a 7.2-percent expansion the year after. It was the best two years the country has had since the 1950s.
China is still expected to grow the fastest in the region. Coming in second for 2014 and 2015 would be the Philippines, BDO said.
Other major economies in the region are expected to grow slower. For instance, Malaysia is seen expanding by 5.2 percent, Indonesia by 5.4 percent, and India by 5.5 percent.
The biggest likely change for 2015 would be the acceleration in the implementation of infrastructure projects under the government’s public-private partnership (PPP) scheme.
“Also, much needed government infrastructure spending is once again accelerating with big ticket PPP projects slowly coming out of the pipeline,” Ravelas said.
Eight projects have been awarded so far, with six being rolled out as the Aquino administration sees seven completed PPPs by the end of its term, together with another seven signed PPP agreements and 50 projects reportedly being readied for bidding.