DESPITE slow export activity and uncertainties in US-Philippine relations under the Trump administration, the Philippines is one of the few promising economies in Asia, according to a UK-based lender.
HSBC economist Joseph Incalcaterra, in the bank’s Asian Economics Quarterly Report, said the Philippines, although not spared from external challenges, remains “relatively insulated.”
This has prompted the British bank to elevate its 2017 growth forecast for the Philippines from 6.3 percent to 6.5 percent.
This year, the bank sees continued strength in private investment and consumption, with the peso depreciation and OFW remittances. It also welcomed the government’s agenda to ramp up infrastructure spending, public-private partnerships, tax reforms, and the likelihood of constitutional reforms.
“Fiscal consolidation in recent years allows the government to pursue fiscal expansion, and low debt levels suggest it is sustainable for now,” Incalcaterra said.
Although there are fears that investment from the US, which is the largest contributor of foreign direct investment (FDI) in the Philippines, might fall under new US economic policies, the economist said this could be offset by the $24-billion soft and hard investment commitments from China.