Despite rumors from Analysts that Philippine GDP growth will go down for the 3rd quarter this year, the Philippines is still the strongest in Asia when it comes to GDP growth.
Fearmongering forecasts
This forecast was predicted by some "Analysts" doubting on President Rodrigo Duterte's foreign policy and war on drugs focus. But little they know that this administration has been focusing on infrastructural spending that helped boost the growth in GDP.
As Bloomberg writes:
The Philippine economy grew at its fastest pace in three years last quarter, underscoring the nation’s resilience to global risks as investment surged and consumers spent more. Stocks gained.
Key Points
- Gross domestic product increased 7.1 percent from a year earlier, the Philippine Statistics Authority said in Manila Thursday. The median estimate of 15 economists surveyed by Bloomberg was 6.7 percent
- Compared with the previous quarter, GDP rose 1.2 percent, in line with economists’ estimates
In addition:
Gifted with a young population and backed by $50 billion of revenue from remittances and outsourcing, the Philippines is getting an additional boost from Duterte’s $160 billion-infrastructure plan aimed at creating jobs. Projects include at least $1 billion of contracts to build an airport and a railway to transform a former U.S. military base into a commercial hub.
Markets
- Philippine stocks rose a second day, climbing as much as 2.2 percent. They were up 1.1 percent as of 11:01 a.m. in Manila.
- The peso was little changed at 49.32 per dollar.
Analyst Takeaways
- “The Philippines will remain an outperformer in the region,” said Rahul Bajoria, a senior economist at Barclays Plc in Singapore. “It is domestically driven, with consumption holding up quite well and the fiscal spending is planned. The global risks we’re seeing including to trade won’t fundamentally alter its prospects.”
- “In the short term at least, we expect the economy will continue growing at a decent pace,” Gareth Leather, senior Asia economist at Capital Economics Ltd. in London, said in a note. “The foundations are in place for growth to remain strong, but recent political events, both in the US and domestically, have made the outlook much less certain.”
- “Putting money on infrastructure-related stocks is the smart bet and it’s exactly what I am doing,” said John Padilla, who helps manage about $9.1 billion at Metropolitan Bank & Trust Co., the Philippines third-largest money manager. “This growth poses now more challenge for President Duterte to keep the pace. It supports the view that Philippines needs infrastructure to sustain this growth."
Other Details
- Household spending, which makes up about 70 percent of GDP, rose 7.3 percent from a year earlier
- Government spending gained 3.1 percent
- Investment surged 20 percent
The Philippines remains to be the strongest growing economy in Asia.
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