Economic growth likely quickened to 7.2 percent in the fourth quarter from 7.1 percent in the third quarter, on sustained robust domestic demand and private consumption, Moody’s Analytics, a division of Moody’s Corp. said in a report over the weekend.
“We expect Philippines GDP growth to have accelerated to 7.2 percent year-on-year in the final quarter of 2016, compared with 7.1 percent in the three months to September. This would be the seventh consecutive quarter in which year-on-year GDP growth accelerated,” Moody’s said.
“The main driver of output growth will continue to be domestic demand, with private consumption and investment both expanding rapidly. Goods exports should also post a modest improvement compared with previous quarters because of the uptick in global demand in recent months,” it said.
The government is scheduled to release the fourth-quarter GDP data on Thursday.
The economy grew 7 percent in the first three quarters of 2016, at the upper bound of the Duterte administration’s target range of 6 percent to 7 percent for the year.
Economists predicted that growth could be sustained on government’s fiscal expenditures, low inflation and robust investment and domestic demand.
The inter-agency Development Budget Coordination Committee maintained the 2017 growth forecast for the Philippines at 6.5 percent to 7.5 percent, on strong macroeconomic fundamentals despite external uncertainties. DBCC also kept the 7 percent to 8 percent growth target for 2018 to 2022.
British banking giant Hongkong and Shanghai Banking Corp. revised upward its growth forecast for the Philippines this year to 6.5 percent from the previous estimate of 6.3 percent on government’s higher fiscal spending and resilient domestic demand that will offset the impact of various headwinds from external fronts.
It said the economic outlook for the Philippines was robust, underpinned by resilient domestic demand. It said a number of reforms, including the tax reforms and other constitutional reforms would likely be undertaken in 2017.
The revised GDP growth forecast for the Philippines this year was at par with that of China at 6.5 percent, but higher than 5.1 percent for Indonesia, 1.2 percent for Japan, 2.4 percent for Korea, 3.8 percent for Malaysia, 1.2 percent for Singapore, 3.2 percent for Thailand and 6.4 percent for Vietnam.
HSBC also upgraded its 2016 growth estimate for the Philippines to 6.8 percent from the earlier forecast of 6.5 percent.
Credit watchdog S&P Global Ratings also slightly raised the Philippines’ growth forecast this year to 6.4 percent from the previous estimate of 6.3 percent, citing the country’s strong external position and low and declining external debt.
The revised forecast showed that the Philippines would outperform most of its peers in the Asian region.