Top economists see 7.2% growth

January 28, 2019

The Philippine economy is forecast to make a comeback this 2019 with a range of 6.8 percent to 7.2-percent growth and an above-average expansion in the next two years, while it is poised to weather risks that are currently dampening other neighboring economies, according to a renowned Philippine-based economist.

Dr. Bernardo M. Villegas, economist and co-founder of the University of Asia and the Pacific (UA&P) cited the First Metro Investment Corp. (FMIC) forecast of 6.8 percent to 7.2 percent gross domestic product (GDP) this year amid strong macroeconomic fundamentals.

The spending for the upcoming mid-term elections in May, hosting of Southeast Asian Games in November, and rising tourist arrivals will also help drive growth this year.

In its 2018 yearend business economics briefing, UA&P economists forecasted that the country’s GDP will expand 6.8 percent this year, and will hit above 7 percent in the coming quarters. Villegas pointed out in a phone interview on January 21 that growth can accelerate especially in light of the elections, which usually add 0.1 percent-0.2 percent to GDP.

Analysts noted that 2018 ended with a positive momentum, thus “giving us reason to be cautiously optimistic for a much better 2019,” said FMIC’s senior executive vice-president Jose Pacifico E. Marcelo during the firm’s annual economics and capital market briefing.

FMIC vice president and research head Cristina S. Ulang added: “we believe that the Philippines is still one of the solid growth stories in Asia,”

BDO Unibank Inc. chief market strategist Jonathan Ravelas said in a report that the country has already seen the worst in 2018, adding that the waters are no longer murky and investors are ready to dive back into the country.

International financial institutions also shared a more positive outlook for the Philippine economy this 2019.

In its recent Global Economic Prospects report, the World Bank cited that the Philippines will weather the world gross domestic product (GDP) growth slowdown from 3 percent in 2018 to 2.9 percent this year and 2.8 percent until 2021.

It also estimated that the country will beat the East Asia and the Pacific GDP growth average of 6 percent this year and in 2020 and 5.8 percent in 2021.

It also shared its forecast of 6.5-percent growth this year. The Philippines will also be among the fastest-growing countries in East Asia and the Pacific, roughly matching or outpacing China (6.5 percent in 2018; 6.2 percent in 2019 and 2020; and 6 percent in 2021), the World Bank report said.

The Department of Trade and Industry (DTI) shared that since 1999, the Philippine GDP sustains 79 consecutive quarters of growth. The average GDP growth from 2010 to 2015 was 6.2 percent and it accelerated to 6.6 percent from 2016 until the third quarter of last year.

Meanwhile the Asian Development Bank (ADB) forecasts a 6.7 percent expansion this year.

The International Monetary Fund (IMF) estimates a 6.6 percent GDP growth for the Philippines, while the Organization for Economic Cooperation and Development’s (OECD) outlook for the country is a 6.5 percent growth in 2019.