By Joann Santiago
MANILA, Oct. 20 (PNA) — The Philippines is projected to post the highest growth among ASEAN-5 economies this year and the next as domestic demands remain strong and issues negatively affecting growth are being resolved.
In a research note, Maybank ATR Kim Eng Financial Corp. noted the cut made by the International Monetary Fund (IMF) on global growth during the two-year period given the weaker-than-expected outturn in major economies.
It, however, cited that projection for emerging and developing Asia remains rosy at 6.5 percent for 2014 and 6.6 percent for 2015.
For ASEAN-5, which groups Indonesia, Malaysia, the Philippines, Thailand and Vietnam, growth for this year is seen to reach 4.7 percent while it is 5.4 percent for 2015.
For the Philippines alone, the projection is a growth of 6.2 percent this year and 6.3 percent next year.
These are, however, lower than the government’s 6.5 to 7.5 percent target this year and 7.0 to 8.0 percent target for 2015.
Relatively, the World Bank (WB) projects the Philippines’ growth during the two-year period to be at 6.4 percent and 6.7 percent, while the Manila-based Asian Development Bank (ADB) sets these at 6.2 percent and 6.4 percent.
Maybank also noted the consensus projection among IMF, WB and ADB of a better output for the domestic economy in the second half of the year after the 6.0 percent expansion from January to June 2014.
”We concur as recent issues holding bank growth in 1H14 (first half of 2014) are being resolved,” it said.
The report said inflation rate is coming down after the September level declined to 4.4 percent from month-ago’s 4.9 percent.
Year-to-date average inflation stood at 4.4 percent, within the government’s 3.0 to 5.0 percent target for the year.
Supply side pressures are becoming less of a problem as oil prices continue to go down even in the international market and imports of basic commodities like rice has been assured.
The problem of port congestion has also been partly addressed after the government of the City of Manila stopped the implementation of the expanded truck ban in its vicinity.
”Vigilance by the private sector keeps the issue on the top of the minds of government officials and we believe this will help prevent a recurrence of the problem,” the research report said.
The report also said that the government has addressed spending constraints even after the Supreme Court declared some portions of the Disbursement Acceleration Program (DAP) unconstitutional.
It identified the country’s edge vis-à-vis the current global economic environment and these are the demand-driven economy, a healthy banking system, young population, low household and corporate debt, declining government liabilities and the improving fiscal and monetary space. (PNA)