ADB says consumption, investment, remittances support 2013 PHL growth outlook of 7%

The Asian Development Bank (ADB) on Wednesday raised its forecast on Philippine economic growth to 7 percent this year, citing a boom in investment, consumption and remittances as main drivers on the back of healthy macroeconomic fundamentals.
 
In a briefing, ADB Philippines country director Neeraj Jain said the latest outlook comes from a 6 percent projection in April. He was talking to reporters at the bank’s headquarters in Mandaluyong City.
 
The multilateral lender also raised its 2014 growth forecast to 6.1 percent from 5.9 percent, with robust public and private spending fueling the expansion beyond 2013.
 
"The economy is riding on the back of hefty domestic demand and investment, low inflation and interest rates, buoyant remittance flows, and upbeat business sentiment," Jain said.
 
Philippine output grew the fastest in Southeast Asia at 7.6 percent in the first half, but the government is keeping its 6 to 7 percent gross domestic product (GDP) outlook this year from 6.8 percent in 2012.
 
Despite seeing good prospects for the Philippine economy, the Manila-based lender trimmed its outlook for developing Asia to 6 percent this year from 6.6 percent. It also lowered its 2014 regional forecast to 6.2 percent from 6.7 percent.
 
The bank pointed a finger at slowing growth in China and India, the region's two largest economies, as well as market jitters over the inevitable pullback of US Federal Reserve bond-buying stimulus known as QE or quantitative easing.
 
"Asia and the Pacific growth will come in below earlier projections due to moderate activity in the  region's two largest economies and effects of QE nervousness," ADB chief economist Changyong Rhee noted in a statement.
 
Philippine officials are boasting that the economy is relatively shielded from the QE scenario because of healthy levels of current account surpluses and foreign exchange reserves.
 
But ADB noted the greatest challenge facing the Philippines joblessness, saying there is a need to clear obstacles to direct investments by upgrading infrastructure and improving governance.
 
The premise is that more direct investments sunk into the economy create more job opportunities. - VS, GMA News