British banking giant Standard Chartered sees the Philippines sustaining a broad-based domestic growth despite outside pressures.
The bank sees the country’s gross domestic product (GDP) growing by 6.4 percent this year, citing “fading downside risks to domestic growth.” The country achieved a 5.9-percent growth in 2015.
The forecast was lower than the 6.8-7.8 percent official target of the government, which StanChart economists Jeff Ng and Edward Lee noted was due to “strong external headwinds.”
Stanchart’s research note did not elaborate on the external headwinds, but recently, for instance, the United Kingdom voted to leave the powerful trade bloc European Union, initially raising global risk aversion. Commodity prices also continued to be volatile alongside China’s economic slowdown that has been creating uncertainties across the globe.
“Household consumption is likely to remain supported by a lower unemployment rate and the second-round effects of election-related spending,” they said.
The election fever during the first quarter saw the country achieve a 6.9-percent year-on-year GDP growth, making it the strongest performer in Asia.
The economists also noted investments in equipment and construction had reinforced the positive momentum in infrastructure development. They said government spending had improved since the third quarter of 2015.
“Growth is likely to remain broad-based across sectors for the rest of 2016. Services growth is solid, supported by wholesale and retail trade, business, financial and other services,” the economists said.
While growth was buoyant, the StanChart economists was seeing downside risks to the current account.
Remittance growth was also seen slowing as overseas income was affected by a sluggish global economy and a strong peso.