2016 elections may spell economic, investment slowdown for 2015 – HSBC

British banking giant HSBC Corporation Ltd. sees the Philippine economy slowing down a bit in 2015 before making a slight rebound in 2016 as investors start to downscale investments ahead of the 2016 national elections.

 

The Philippine economy is forecasted to grow by 5.9 percent this year and 6.1 percent in 2016, HSBC Asian Economic Research co-head Frederic Neumann told reporters in a briefing in Makati City.

 

"Anything around 6 percent in this global growth environment makes the Philippines one of the top performers and has been consistently in it for years," he said.

 

Neumann said bank's gross domestic product (GDP) forecast is based on the growing concerns among investors if the reforms implemented by the Aquino administration would be sustained after the 2016 elections – if policies will stay consistent, if focus on infrastructure will enhance, or if there will be a surprise shift in policy.

 

In Asia, the Philippines is placed as one of the fastest growing economy along with China, India and Vietnam, he noted.

 

Last year, the Philippine gross domestic product (GDP) grew by 6.1 percent, after accelerated government spending helped the economy recover in the fourth quarter. It was the second fastest growing economy in Asia, next to China.

 

In 2013, the Philippine economy grew by 7.2 percent.

 

"We sense that businesses and foreign investors are starting to maybe be a bit cautious about next year, because they would want to know what the future brings," he said. 

 

"Before you commit yourself to long-term, big investment projects, you need to know what the policy environment is. Investments this year is actually slower, in part, because of the uncertainty," he added.

 

But if the new president in 2016 plans to build on the reforms by the Aquino administration, investments would "snap back very quickly," Neumann noted.

 

"But until then, the economy is going to be largely consumption supported rather than investment-supported," he said. – VS, GMA News