The robust economic expansion in the first quarter is seen sustainable throughout the year, prompting British financial giant Standard Chartered Bank to raise its full-year growth forecast for the Philippines to 6.4 percent.
Separately, debt watcher Moody’s Investors Service said the Duterte administration’s plan to liberalize investment restrictions would augur well for growth in the next six years and could be positive to the country’s credit rating.
In a note to clients Friday, StanChart noted that domestic demand, business process outsourcing (BPO) revenues as well as fiscal support buoyed the Philippine economy during the first quarter and the bank “[expects] the strong momentum to be sustained for the rest of the year.”
The government on Thursday reported that the gross domestic product (GDP) grew 6.9 percent during the first three months, faster than the 5-percent growth a year ago as well as the 6.5-percent expansion a quarter ago.
Despite weak merchandise exports, StanChart said “the divergence between domestic and external demand widened in the first quarter,” with the former adding 11.8 percentage points to the growth figure to compensate for the 5.5-point drop from net external trade.
“Household consumption was supported by a lower unemployment rate and election-related spending. Investment in equipment and construction has reinforced the positive momentum in infrastructure development,” StanChart noted.