MANILA, Jan 28 (PNA) — Higher electricity sales and double-digit average exports growth in the fourth quarter of 2014 made economists of Metrobank and the University of Asia & the Pacific (UA&P) forecast a better growth turn-out for the Philippine economy.
In its co-produced monthly publication Market Call, Metrobank and UA&P said consumer spending remain strong and drop in oil prices “appears less transitory.”
”We expect GDP (gross domestic product) to resume its upward trend starting Q4 (fourth quarter of 2014),” it said.
In the third quarter of 2014, the domestic economy registered sustained growth deceleration to 5.3 percent from quarter-ago’s 6.4 percent bringing the three-quarter growth to 5.8 percent.
The slower-than-target output in the first three quarters of last year was partly traced to the congestion in Manila port as a result of the expanded truck ban implemented by the city government of Manila from February to September.
The government’s growth target for 2014 is a range between 6.5 to 7.5 percent.
The government is scheduled to report the fourth quarter and full year 2014 growth output this Thursday.
Relatively, the Market Call eyes continued deceleration of domestic inflation rate and for this to average at 2.4 percent in the first quarter of 2015.
Last year, rate of price increases in the country averaged at 4.1 percent, within the government’s three to five percent target.
The report noted that sustained drop in the prices of oil in the international market is seen to result to the same trend in the prices of food and other consumer goods.
”This low level of inflation is expected to span the whole of first half (of 2015),” it said.
Exports is also seen to grow double digit this year due in part to the recovery of the US economy, which in turn benefits other destinations of Philippine exports like China, Japan, South Korea and Taiwan.
”We continue to expect further sustain export expansion at double-digit pace in 2015,” it said.
Meanwhile, the report forecasts weakening of the Philippine peso this year “as portfolio inflows may offset part of the US dollar’s attractiveness.”
The peso, to date, is posting several months’ high partly because of the recently announced stimulus program of the European Central Bank (ECB), which is set to be implemented from March 2015 to September 2016.
Analysts said capital flows to emerging markets like the Philippines is seen to remain strong and away from the euro zone but the expected increase in US interest rates as early as the middle of this year is seen to counter the inflows. (PNA)