By Joann Santiago
MANILA, Oct. 8 (PNA) — Fitch Ratings remain optimistic for a robust growth for the Philippines in 2015, despite cutting its growth projection for 2015, on back of strong domestic demand.
The debt rater now sees a 5.6 percent growth for the country this year, lower than its previous forecast of 6.3 percent “as weak net exports weighed on economic performance in the first half of the year.”
The domestic economy expanded by 5.3 percent as of end-June this year, weaker than the 6.2 percent a year-ago on account of the slowdown in the first quarter of the year.
Growth, as measured by gross domestic product (GDP), decelerated to five percent in the first three months of this year, weaker than the previous quarter’s 6.1 percent.
Aside from weak net exports it was also dragged by the weaker-than-programmed government spending.
”However, Fitch expects the economy to still expand at double the pace of the “BBB” rated median in 2015,” it said referring to the 2.7 percent median rate.
This growth is also supported by the rising imports, it said.
Fitch, however, cited that risks remain because of the impact of El Nino, which the state weather bureau expects to last until the first half of 2016, and if government spending retreats anew after recovering in the second quarter of the year.
Last September, the credit watcher revised its outlook on the country to ‘Positive’ from “Stable” because of ongoing improvement in the country’s governance standards.
”Evidence that such improvement can be sustained beyond the next election cycle would be positive for the credit,” it said.
Fitch cited as another advantage for the domestic economy its demographic profile, with the population’s average age pegged at 23.5 years old.
”Economic growth continue to outperform ‘BBB’-rated peers, and favorable demographics support the medium-term growth outlook,” it said. (PNA)