President Rodrigo Duterte. AP FILE PHOTO
Economic growth is seen staying strong in the second quarter, although global banking giant Deutsche Bank warned that investor sentiment could be dampened by uncertainty about President Rodrigo Duterte’s health condition.
“Data for April and May continue to point to a robust domestic economy, with an added lift from exports and the recent pick-up in government spending,” Deutsche Bank economist Diana del Rosario said in a report Friday.
The latest government data showed that exports jumped 16.3 percent year-on-year as of end-May, while expenditures on public goods and services rose 6 percent during the first five months.
However, Deutsche Bank noted that “non-oil imports and remittances slowed relative to the first quarter.”
“Security concerns may have also placed a drag on travel and consumption, dampening second-quarter GDP [gross domestic product] growth,” Deutsche Bank added, referring to the armed conflict between government forces and ISIS supporters in Marawi City, which led to the President’s declaration of martial law in Mindanao in May.
But for Deutsche Bank, the main risk to the growth outlook lies on the health condition of the country’s chief executive.
“Questions about President Duterte’s health situation, if prolonged and not fully clarified by the administration, could over time weigh on markets and growth via dampened investments,” it said.
Deutsche Bank projected 6.2-percent GDP growth this year before rising to 6.5 percent next year, although both forecasts were below the government target ranges of 6.5-7.5 percent for 2017 and 7-8 percent for 2018.