HSBC sees 4Q 2014 GDP growth matching dismal 3Q figure

MANILA, Philippines – Hong Kong and Shanghai Banking Corp. Ltd. (HSBC) sees Philippine economic growth in the fourth quarter of 2014 to have only matched the dismal 5.3-percent expansion posted during the previous quarter.

According to HSBC Global Research’s Global Economic Calendar-Asia Edition released last week, the bank’s forecast for the Philippines’ fourth quarter gross domestic product (GDP) growth was at 5.3 percent.

The actual fourth quarter and full-year GDP growth figures for 2014 will be announced by the government on Thursday.

“We expect the deceleration of private consumption to pull down fourth quarter 2014 growth in the Philippines,” HSBC said.

“Remittances are facing high base effects, which dampens year-on-year growth. Coupled with this, public spending, although expected to pick up, is unlikely to be enough to boost growth,” it explained.

As for interest rates, HSBC said the Bangko Sentral ng Pilipinas would likely keep them “on hold” in order to “support domestic demand.”

The economy must grow by a robust 8.2 percent in the fourth quarter for it to hit at least the lower end of the government’s 2014 target of 6.5-7.5 percent growth—a tall order following a dismal third quarter performance mainly brought about by anemic public spending.

Economic managers had conceded that the “realistic” GDP growth in 2014 would have settled at 6-7 percent, a range whose lower end was below the official goal.

Majority of the economists polled by the Philippine Daily Inquirer last week projected faster economic growth during the fourth quarter than the third quarter, even as the full-year figure would possibly be below the target.