British banking giant Standard Chartered expects the Philippines to be the fastest growing among Southeast Asia’s emerging markets this year, with economic growth seen firming up at 6.8 percent from 6.6 percent last year.
This is seen to make the Philippines the fastest-growing Asean-6 (a bloc that also includes Indonesia, Singapore, Thailand, Vietnam and Malaysia) market for the second consecutive year, according to an April 20 research note written by economists Chidu Narayanan and Divya Devesh.
“Strong domestic demand, increasing infrastructure investment and steady services-sector growth will remain the primary growth drivers, in our view,” the research said.
The economists project a gross domestic product (GDP) growth of 7 percent in the first semester and a more moderate 6.5 percent in the second semester as the high base effect from last year kicks in.
Household spending and infrastructure investment are seen to provide strong support for the country’s 2017 growth while Stanchart also expects solid growth in the services sector, supported by wholesale and retail trade and by business, financial and other services.
Public-sector construction momentum is projected to pick up in the second half, while manufacturing growth is seen steady.
The economists also expect higher spending by a young and growing population to keep the services sector and household consumption strong, particularly as more overseas Filipinos return to the Philippines.
“In the near term, infrastructure expenditure is likely to provide the biggest boost to growth. Gross fixed capital formation (GFCF) has been the biggest contributor to GDP since fourth quarter 2015. GFCF rose 20.8 percent in 2016, contributing 4.95 percentage point of the year’s 6.6 percent growth—more than household consumption,” the research said. —DORIS DUMLAO-ABADILLA