First Metro Investment Corp., the investment banking arm of the Metrobank Group, said Monday it expects the Philippine economy to grow between 6.5 percent and 7 percent this year.
First Metro president Rabboni Francis Arjonillo said robust domestic demand, election-related spending in the second quarter, remittance inflows, business process outsourcing receipts and the planned higher spending of the Duterte administration would support economic growth in 2016.
“We remain optimistic on the performance of the Philippine economy for the rest of the year. With the anticipated 6.5 to 7 percent GDP growth, the country is expected to continue its rapid growth,” Arjonillo said in a news briefing in Makati City.
He said the Philippines would continue to outperform its peers in the region and buck headwinds coming from the volatile global economy and financial markets.
First Metro’s GDP target is within the Duterte administration’s estimate of 6 percent to 7 percent growth this year.
Budget Secretary Benjamin Diokno announced last week the revision of the target from 6.8 percent to 7.8 percent made by the Aquino administration.
Arjonillo said the country’s fiscal position remained healthy while the growth-supportive monetary policy was expected to persist even after the change in leadership.
The gross domestic product expanded by 6.9 percent in the first quarter. Economists said growth could be higher in the succeeding quarters under the plan of the Duterte administration to ramp up spending.
The economy grew 5.9 percent in 2015, missing the government’s official target of 7 percent to 8 percent, pulled down by the Aquino government’s anemic fiscal spending. However, the Philippines remained one of the fastest-growing economies in the region.
Arjonillo said the growth of remittances, one of the backbones of economic growth for the past few years, would be tempered by the impact of low oil prices, especially in the Middle East. Remittance growth is seen this year between 2 percent and 4 percent.
“Clearly, the Philippines has emerged as one of the highest-performing economies in Asia, running up to six years of strong growth and remained resilient in the face of global economic and financial markets turbulence,” Arjonillo said.
DBS Bank of Singapore earlier kept its growth forecast for the Philippines this year at 6.3 percent.
“At this juncture, we maintain our 2016 GDP growth forecast at 6.3 percent. There are some upside risks to our 2017 GDP growth forecast of 6.3 percent, given the upward revision in fiscal deficit,” DBS said.
DBS said a moderation in private sector investment could offset the growth-boosting measures set by the new government.
Credit watchdog Standard & Poor’s Rating Services slightly raised the growth forecast for the Philippines this year to 6.1 percent from the earlier estimate of 6 percent, despite the turmoil brought about by the recent exit of United Kingdom from the European Union and slowdown in Chinese economy.