ING expects PH economy to grow by 6.7% during Duterte’s 6-year term

The Philippine economy may grow at a faster pace of 6.7 percent during the six-year term of the Duterte administration as government spending intensifies with the rollout of big-ticket infrastructure projects, an economist at Dutch financial giant ING said.

This will be an improvement from the 6.1 percent trend growth rate under the Aquino administration and 4.8 percent under the Macapagal-Arroyo administration.

ING’s latest forecast was also an upgrade from its previous trend growth projection for the Philippines of 6.5 percent for 2017 to 2022.
“You see, government spending, infrastructure spending and public construction are quite strong and we think the resolve there is quite solid that spending on both government headline basis and infrastructure spending will continue,” ING Philippines economist Joey Cuyegkeng said.

The country’s economic performance last year also showed a significant improvement, he said.

The economy grew by 6.7 percent in 2017, slower than 6.9 percent in 2016 but still respectable in the absence of election spending that provided a boost in the previous year.

The only risk so far continues to be on trade balances, Cuyegkeng said, referring to the widening external deficits mostly due to the importation of capital goods needed to fuel an expanding economy.

ING also sees the Bangko Sentral ng Pilipinas raising its key interest rates by a total of 75 basis points this year to curb upward pressure on consumer prices.

If the BSP hikes rates at its next monetary in March, it will be the first time since September 2014 that the central bank will take a hawkish move.