Fitch Ratings ups PHL economic growth forecast

Fitch Ratings on Friday raised its Philippine economic growth forecast for 2013 to the upper-end of the official target, as the debt watcher unveiled new projections for this year and the next. 

 

In a report, Fitch said it sees the Philippine gross domestic product (GDP) growth settling at 7.0 percent in 2013, a revision of its projection of 6.2 percent in October.

 

The new forecast falls within the upper limit of government's 6 to 7 percent growth goal for last year. The Philippine economy grew by 6.8 percent in 2012. 

 

Last month, Socioeconomic Planning Secretary Arsenio Balisacan projected growth at 4.1 to 5.9 percent in the fourth quarter of 2013, capping the full-year GDP figure at around 7 percent. 

 

Fitch, however, said Philippine growth may slowdown to 5.5 percent in 2014, before rebounding to 6.0 percent in 2015. This is the first time the debt-watcher gave projections for this year and the next. 

 

In a telephone interview Friday, Metropolitan Bank & Trust Co. research head Ildemarc Bautista said forecast upgrades were mostly done after Philippine economy grew strong in the first three quarters of last year at 7.4 percent. 

 

Metrobank also expects Philippine GDP to hit 7.0 percent for the whole of 2013. 

 

However, “the market has discounted a sharp slowdown on account of Typhoon Yolanda disruptions,” he said. “There's nothing we can do about that, but a slow growth is not the trend,” Bautista said.

 

The lower forecast for the year could be attributed from the high base in the first quarters of 2013, he said, adding that a surge in the last quarter of 2014 is “likely.”

 

Emerging East Asia

Fitch, meanwhile, said in the report that emerging Asia has ebbed. 

 

The region is facing greater external funding needs and less resilient policy frameworks are likely to be more at risk from market stress over the US Federal Reserve's tapering of its bond-buying program, the debt watcher said.  

 

“Questions over the sustainability of growth in emerging Asia have surfaced following a difficult 2013 that was highlighted by pressures related to Fed tapering,” the report read. 

 

“Indonesia, the Philippines and Thailand, however, do not appear to be facing any significant self-imposed budget constraints, and could focus on raising capital/infrastructure spending,” it read. 

 

The debt watcher is forecasting real GDP in emerging Asia, excluding China, to grow by 5.4 percent and 6.2 percent in 2014 and 2015, respectively, compared with a 5.0 percent estimate in 2013.

 

China may grow by 7.6 percent in 2013, and by 7.0 percent for both 2013 and 2014, Fitch said. – VS, GMA News