The International Monetary Fund is set to raise its growth forecast for the Philippines this year from the initial estimate of 6.4 percent, after the gross domestic product expanded 7.1 percent in the third quarter, an official said over the weekend.
“The third-quarter GDP outturn in the Philippines, led by a recovery in agriculture and continued strength of private consumption and gross investment, was faster than anticipated in our 6.4-percent growth forecast for 2016,” IMF resident representative to the Philippines Shanaka Jayanath Peiris said in a statement.
The Asian Development Bank earlier revised upward its 2016 growth outlook for the Philippines to 6.8 percent from 6.4 percent.
The 7.1-percent third-quarter growth brought the average expansion in the first three quarters to 7 percent, representing the upper bound of the Duterte administration’s target range of 6 percent to 7 percent this year.
“Therefore, we will mostly likely be revising up our growth forecast for 2016 in the next round of world economic outlook revision,” Peiris said.
Peiris said the adjustments for 2017 and the medium term would depend on global developments and financial conditions that had become “more uncertain lately.”
The IMF in September raised its growth forecast for the Philippines to 6.4 percent from the earlier estimate of 6 percent on sustained robust domestic demand and expected recovery in exports.
It also increased the projection in 2017 to 6.7 percent from 6.2 percent. The upward revisions were contained in the latest report on World Economic Outlook.
The country’s third-quarter growth of 7.1 percent, which was driven by investments, robust domestic consumption and industries, was faster than China’s 6.7 percent, Vietnam’s 6.4 percent, Indonesia’s 5 percent and Malaysia’s 4.3 percent.
The economy grew 6.8 percent in the first quarter and 7 percent in the second quarter, on election-related spending, robust domestic demand and investment.
Japanese financial firm Nomura also raised its GDP growth forecast for the Philippines in 2016 to 6.7 percent from 6.3 percent.
For next year, Nomura raised its GDP growth forecast to 6.3 percent from 6 percent, saying fiscal support to growth would remain strong, given the pragmatic and pro-growth stance of the new government.
Credit Suisse also upgraded its growth forecast for the Philippines this year to 6.5 percent from its previous estimate of 6.2 percent.
J.P. Morgan said the Philippine economy had the potential to grow 6.4 percent this year, as fiscal and infrastructure spending could lift domestic investment.
The ADB raised the 2017 GDP growth forecast for the Philippines to 6.4 percent from 6.2 percent.