Philippines expects 0.8% growth in 2009
Investment banking group CLSA said in its latest report on Asia Pacific economies that the Philippines would grow only 0.8 percent this year, the lowest forecast made so far by any investment adviser, multilateral lender or credit agency, reported local newspaper the Daily Inquirer.
In a study on the Philippines prepared by Sharmila Whelan, CLSA said the country was “steadily running out of momentum” along with other economies in the region.
CLSA added that the growth of Philippine gross domestic product (GDP) would slow even further at 0.7 percent in 2010. Gross domestic product is the total output of goods made and services rendered within an economy for a given period.
The group said such slowdown would be driven by a contraction in export volumes by 33 percent, which would have a “large knock effect on industrial production and on investment spending.”
“Judging by the regional trend of continued year-on-year declines in February, it is likely Philippine exports fell again at double-digit rates (that month, following a drop of 41 percent in January),” CLSA said.
The stockbrokerage firm noted that the Philippines’ exports to its biggest markets—the United States, Japan and Hong Kong, three economies which are now in technical recession—were falling faster and faster.
As for consumption, CLSA has forecast real spending to slow down by 4 percent this year amid expectations of slower growth in money remittance inflows.
“We do expect government spending to rise this year by 11.7 percent and this, along with falling import demand, will provide some relief but not enough to forestall a sharp slowdown in economic growth,” it said.
In comparison, credit watchers like Standard and Poor’s forecast Philippine GDP to grow 2.2 percent to 2.7 percent, Moody’s Investors Service by 2 percent, and Fitch Ratings by 2 percent.
Multilateral lenders like the Asian Development Bank bets on 2.5 percent, the International Monetary Fund on 2.25 percent and the World Bank on 1.9 percent.
Other investment advisers like UBS and DBS put the number at 1.8 percent and 3.3 percent, respectively.
The government’s official target, as of the latest, is between 3.7 percent and 4.4 percent.
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