IMF keeps PHL growth forecast at 6% this year

Money transfers by Filipinos overseas to their families in the Philippines, plus low interest rates will continue to support consumer spending and investments, an ideal situation that has prompted the International Monetary Fund (IMF) to keep its growth forecast for the Southeast Asian country unchanged. The multilateral lender sees developing Asia again leading global growth this year with Europe, United States to experience the drag of economic headwinds. “Robust remittance flows and low interest rates should continue to support private consumption and investment in the Philippines,” the IMF noted in its latest World Economic Outlook (WEO) released late Tuesday. In its forecast that is in line with the expectations of Manila-based Asian Development Bank, IMF noted Philippine output will likely grow by 6 percent this year and 5.5 percent next year. However, the World Bank sees the Philippine economy growing faster at 6.2 percent this year. IMF thinks developed nations will grow slower, the lack of fiscal consolidation plans, limited space for monetary policy and high private sector debt hounding their economies. “Emerging market and developing economies are still going strong, but in advanced economies, there appears to be a growing bifurcation between the United States on one hand and the euro area on the other,” the WEO read. IMF sees advanced economies growing by 1.25 percent this year and 2.25 percent in 2014, from an earlier forecast of 1.4 percent and 2.2 percent, respectively. “Unless policies address these risks, global activity is likely to suffer periodic setbacks. By the same token, a stronger-than-projected policy response could also foster a stronger recovery in activity,” the WEO read. Last year, Philippine output was the fastest in the Association of Southeast Asian Nations (ASEAN) at 6.6 percent. This year, IMF said growth in ASEAN-5—which groups Indonesia, Thailand, Malaysia, Vietnam and the Philippines—“will remain strong at 6 percent in 2013, reflecting resilient domestic demand.” Specifically, Indonesia will lead the way by growing 6.3 percent. Thailand's GDP is expected to hit 5.9 percent, Malaysia (5.1 percent) and  Vietnam (5.2 percent). China and India's economy, meanwhile, are expected to grow at 8.0 percent and 5.7 percent this year before accelerating to 8.2 percent and 6.2 percent next year. — Siegfrid Alegado/VS, GMA News