MANILA, Jan. 6 — The country’s economy is projected to sustain a robust growth of 6.5 percent this year, slightly lower than the 2013 estimate of 6.75 percent, on the back of buoyant infrastructure investments and stronger consumption, according to a finance firm.
“The administration’s main thrust is infrastructure spending which is seen to be the catalyst for the development of other industries such as manufacturing and tourism,” said Jonathan Ravelas, chief market strategist of Banco de Oro Unibank.
Ravelas said the implementation of the government’s public private partnership (PPP) program is also imperative in the expansion of these industries.
The government has doubled its infrastructure budget to P400 billion this year.
“Even though legislative and political issues hamper the growth of public and private investments, we believe that these will be one of the major growth drivers in the year ahead,” he noted.
On the consumption side, the Bank expects demand will continue to come from those working for business process outsourcing (BPO) companies and recipients of OFW remittances.
Ravelas noted that the local economy continues to be consumer driven and has “pretty much been insulated from external factors.”
“While the country’s financial market was significantly affected by the signal of the Fed (Reserve) to start tapering QE (quantitative easing), the Philippine economy has remained resilient amidst the uncertainty and volatility brought about by the European and U.S. markets,” he noted.
Nevertheless, the expected improvement in the economies of trading partners will awaken the country’s lackluster exports sector, Ravelas said.
“Despite the setbacks and adversities the country faces, our strong fundamentals support the growing economy. We may not be immune to the effects of factors beyond our control, but our robust macro-economic fundamentals serve as buffer for such headwinds in the future,” he added.
The country’s gross domestic product (GDP) grew 7.4 percent in the first nine months of 2013, making it the fastest growing country in Southeast Asia.
Despite the devastation caused by super typhoon Yolanda, BDO sees the economy growing by 6.75 percent in 2013 given the small contribution of about 2 percent of Eastern Visayas. (PNA)