Philippine economy now tipped to enjoy growth of 6.1 per cent

However, behind the surging confidence, it said there were emerging questions about the sustainability of the economy’s growth as the unresolved crisis in the West meant that the country would have to rely on its internal sources of growth.

In a February 10 commentary dated “High on Snake Blood” written by economists Romeo Bernardo and Marie-Christine Tang, Global Source projected the country’s gross domestic product (GDP) growth at 6.1 per cent this year, upgrading its previous forecast of 5 per cent. The upgraded forecast is more optimistic than the 5.6-per cent consensus forecast based on FocusEconomics, although slower than the actual 6.6-per cent expansion last year.

The slightly slower growth seen for this year factored in weak external growth and a strong local currency weighing down exports.

For 2014, Global Source said it expected a growth of 5.8 per cent against the 5.7-per cent forecast.

“We hinge our higher-than-consensus growth forecast on the domestic macro policy environment continuing to be supportive particularly in terms of higher government spending, further expansions in private investments and election spending aiding consumption growth,” it said.

“Prevailing policies of easy money in advanced economies will again frame domestic monetary policy this year with the problem of capital inflows compounded by ‘risk on’ conditions in global financial markets.”

But Global Source said a number of things could drag growth lower. It said the worst case would involve a sharper fiscal contraction in the United States and a deeper recession in Europe with China unable to pick up the slack due to internal excesses built up over the years. It added that tensions in the Middle East might again flare up, reversing the forecast downtrend in oil prices.