Sign up | Log in



Home  >>  Daily News  >>  Philippines News  >> Economy  >>    IMF upgrades Philippines growth outlook to 3.6 percent

22 April 2010

IMF upgrades Philippines growth outlook to 3.6 percent

Related Stories
March 15, 2010
Philippine economy seen growing 4.5%

March 3, 2010
Philippines: Remittances hurt manufacturing, exports

February 7, 2010
Philippine businesses see easier funding in 2010

February 3, 2010
Philippines expects strong peso to help temper inflation

January 31, 2010
Philippines expects bank lending to stay healthy

January 30, 2010
Poll spending seen boosting Philippine GDP

January 28, 2010
Philippines: Export sector rebound seen in 2010

The International Monetary Fund (IMF) has again upgraded the Philippines’ growth outlook, but it expects the country to still trail behind its neighbors in Southeast Asia this year, local online news website GMANews.TV reported.

In its latest World Economic Outlook, the IMF said it expects the Philippine economy to grow by 3.6 percent this year from the previous 3.2-percent forecast as a result of improving private investments that would boost private consumption.

The growth forecast is slower than 6.5 percent for Taiwan, 6 percent each for Indonesia and Vietnam, 5.7 percent for Singapore, 5.5 percent for Thailand and 4.7 percent for Malaysia.

"The Asean-5 economies are projected to grow by 5.5 percent in 2010. Private domestic demand is expected to be the main driver of growth, with net exports playing a lesser role than in the past, reflecting stronger imports relative to historical standards," the multilateral lender added.

The IMF stated in the report that higher investment inflows would help boost private consumption.

"For many [Association of Southeast Asian Nations] economies, notably the Philippines, Thailand and Malaysia, improving the environment for private investment can play an important role in boosting private domestic demand," the Washington-based lender said.

Exchange rate flexibility would also boost the purchasing power of consumers.

"Greater exchange rate flexibility in many economies would also facilitate rebalancing by raising households’ purchasing power and helping shift productive resources from the tradable to the nontradable sector," it said.

The IMF forecast is within the government’s 2.6-3.6 percent target, and faster than the World Bank’s 3.5-percent projection but slower than 3.8 percent from the Asian Development Bank.

For next year, the IMF said Philippine economic growth would improve to 4 percent — still slower than Vietnam’s 6.5 percent, Indonesia’s 6.2 percent, Thailand’s 5.5 percent, Singapore’s 5.3 percent and Taiwan’s 4.8 percent.

The lender likewise expects inflation to average at 5 percent this year and 4 percent next year.

The IMF’s inflation forecast is within the central bank’s 3.5-5.5 percent goal this year and 3-5 percent next year.

The IMF noted that despite the country’s relatively stronger fiscal response last year, few Asian economies appear to face debt sustainability challenges on a scale similar to those faced by a number of developed countries.

The government hopes to trim the budget deficit to P293 billion or 3.5 percent of economic output this year after a record P298.5 billion or 3.9 percent of output last year.

The National Government has set aside P100 billion to stimulate the economy this year after spending P330 billion under the Arroyo administration’s so-called economic resiliency plan that cushioned full impact of the global economic slump.

The central bank, in a bid to boost liquidity, also cut benchmark interest rates by 200 basis points between December 2008 and July 2009, bringing the overnight borrowing rate to a record low of 4 percent. "With regard to monetary policy, it may not be too early to start unwinding the stimulus if output gaps are closing and inflation pressures are beginning to emerge," the IMF said.


Comment on this Article. Send them to
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below 





1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand