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Friday, March 29, 2024

ING says economy to grow 6.2% in ’17

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THE Philippine economy is expected to grow 6.2 percent this year mainly on the back of sustained domestic demand and significant contribution from the agriculture sector, ING Bank Manila senior economist Joey Cuyegkeng said in a report Monday.

Cuyegkeng also projected gross domestic product to expand 6.2 percent in the first quarter of 2017.

“We expect agriculture to recover with a 3.3-percent growth in 2017. Domestic demand would remain strong,” Cuyegkeng said.

He said 2017 would rely on more normal economic activity unless strong investment growth in 2016 was carried over this year.

“We expect construction activity to sustain its pace of activity that was seen last year. Private and government construction activity would continue but base effects would keep growth from posting a faster than 2016 growth. Durable equipment investments this year may eventually slow after a torrid pace of investments in durable equipment in 2016,” he said.

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DBS Bank of Singapore, meanwhile, said net exports might have some implications on GDP growth momentum ahead. It said investment growth might slow to 10.5 percent in 2017 and although still strong compared to elsewhere in the region, it could be just half the projected pace recorded in 2016.

Government data showed Philippine exports declined 7.5 percent from a year ago to $4.73 billion in November of 2016, following a 3.7-percent growth in October. It was the first drop in three months, as sales declined the most for woodcraft and furniture (-28.9 percent), chemicals (-26.2 percent) and machinery and transport equipment (-25.4 percent).

DBS also said private consumption growth would ease to 6.5 percent in 2017, as the election impact faded away and normalization was set to occur.

“Still, private consumption growth is running above its five-year average of 6.2 percent. Given that the government continues to be aggressive on its policies, the spillover impact on consumption growth is likely to remain rather significant,” the bank said.

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