By PHILIPPINE DAILY INQUIRER
In a report on the Philippines published on Tuesday, UK-based Capital Economics said “there are good reasons to think that [Aquino’s] achievements will outlast his presidency”, hence it remains “optimistic that the Philippines will continue to grow strongly over the coming years”.
In a statement on Thursday, the Philippine government’s Investor Relations Office (IRO) said the almost US$300-billion economy was expected to grow by 6-7 per cent in the medium to long term despite a change in administration by midyear, citing Capital Economics’ forecast.
The government has projected that gross domestic product will grow by 6.6-8 per cent in each of the next four years.
On Aquino’s watch, the Philippine economy expanded by an average of 6.2 per cent a year – the fastest average rate since the late 1970s. According to the IRO, Capital Economics noted the Philippines’ solid macroeconomic fundamentals, especially its current-account surplus as well as manageable debt burden, which “will help ensure the Philippines avoids crisis situations in the face of global economic challenges”. “Low levels of government debt and a current-account surplus mean that even if investor sentiment did take a sudden turn for the worse after the election, a crisis is unlikely,” Capital Economics said.
Last year, the Philippines posted a current-account surplus of $8.4 billion, sustaining a surplus for 13 straight years. The share of general government debt to GDP, meanwhile, slid to 36.8 per cent as of September last year from 59.2 per cent a decade ago, the IRO noted.
The office said Capital Economics “also recognised efforts to boost the manufacturing sector, which economists say has bigger multiplier effects on growth compared with the services sector”.
The manufacturing sector expanded by 5.7 per cent last year, bringing the average growth to 7.6 per cent during the 2010-15 period.