By Leslie D. Venzon
MANILA, April 5 (PNA) — First Metro Investment Corp. (FMIC), the investment banking arm of the Metrobank Group, has upgraded its forecast for Philippine economic growth to 7.5 to 8.0 percent from 7.0 to 7.5 percent for 2015 on the back of faster government and private sector spending and low oil prices.
The investment bank also expects the economy will keep growing at a fast pace by at least 7.0 percent over the next 15 years due to the so-called “demographic window” which is essential for achieving poverty reduction.
“2015 is a break-out year for the Philippines in terms of economic growth because this is a run-up to the 2016 national elections. Historically, a year that was a run-up to election year, the economy grew additionally by 1.0 percent because of government and private sector spending,” said FMIC president Roberto Juanchito Dispo in an interview.
Dispo identified the domestic sectors that will benefit this year from election-related spending, including food, hotel, entertainment, liquor and media.
He said the fall in oil prices will also boost economic growth by another one percent, noting that the savings in oil can be translated to increased consumption of all sorts of products such as food, clothes, cars and houses.
Philippine gross domestic product (GDP), a measure of an economy’s total output, expanded by just 6.1 percent in 2014, slower than the 7.2-percent growth posted the previous year.
The country posted slightly lower economic growth last year due to sluggish government spending in the early part of 2014, the slowdown of the global economy and rising interest rates.
Dispo said the Philippines is now in a stage that is known as the “demographic window” where 60 percent of its population are already in the working age.
“When this demographic window happened in Japan, Malaysia and Indonesia, they grew very fast for 15 years, high single or double-digit (growths) driven by young labor force. That phenomenon is happening now in the Philippines, 2015 is the beginning… This is a breakout year for the Philippine economy,” he added.
Dispo further said the economy needs to grow at least 7.0 percent for over 15 years in an effort to achieve inclusive growth.
“This has happened in Malaysia and Indonesia. Their economies grew by high-single digit on a sustainable basis and that must happen also in our country,” he said.
Meanwhile, Metropolitan Bank & Trust Company (Metrobank) President Fabian Dee supported the bullish economic outlook.
“Generally, investors are very bullish on our country…The Philippines is just starting a journey where we will be seeing a very sustainable and explosive growth. We are hitting USD 3,000 per capita GDP already and that looks pretty good,” he said in a separate interview.
Dee said the country is at a point of inflexion where motorization will take off and retail business will boom.
“We can already see all these foreign retailers coming here because I think everyone has that perception,” he added. (PNA)