Philippine economy to grow 5% in 3rd quarter

The Philippine economy is expected to grow by 5 percent in the third quarter of the 2011, fuelled by the sustained growth in the industrial sector, government spending and remittances from overseas Filipino workers (OFWs).
FMIC and UA&P Capital Markets Research noted that with more favourable developments for the rest of 2011, the strong growth in China and the US and the easing euro-zone crisis has also contributed to the GDP growth.
“Given the stable inflation rate and the external positive developments, the monetary board would no longer in­crease the key policy rates and reserve requirement for the rest of 2011. It may even favor easing in the wake of an expected weaker global economy,” says FMIC-UA&P.
Exports would likely turn positive again in the fourth quarter, while OFW remittances will continue its robust growth for the rest of 2011 and eventually reach a yearly average of 6 to 8 percent.
FMIC-UA&P expects the foreign exchange rates would have a firmer bias again starting in November due to dollar remittanc­es and portfolio investment flows into the country.
“We see long-term rates sustaining their downward trend, ranging within 5.5 to 6% yield. The latest fiscal stimulus package announced by the government seems to contain only minimal new spending apart from what is already in the budget. As such, we do not see it push yields higher nor threaten the benign inflationary environment.”
In the near term, FMIC-UA&P forecasts the local equities would continue to be driven by risk events from the US and the euro-zone.
“Local earnings season kick-off may lead the market higher. We think a short-term rally can occur although we continue to guard against complacency.”

Korean aid to the Philippines reaches P1 billion

Korean grant aid to the Philippines through the Korean International Cooperation Agency (KOICA) reached a record high of P1 billion in 2011.
The grant aid has funded development programs in agriculture, infrastructure, health and climate change.  Since KOICA’s inception in 1991, the Philippines has received a total of around P4.4 billion in grant assistance.
To facilitate the implementation of development programs, Foreign Affairs Sec. Albert Del Rosario and Korean Foreign Affairs and Trade Minister Kim Sung-hwan signed a framework agreement governing the Korean government’s provision of grant aid to the Philippines.
The agreement sets forth the specific measures and responsibilities to be undertaken by the Philippine government, thus reducing the administrative impediments usually encountered by both countries in implementing development cooperation programs.
It is expected to facilitate the delivery of Korea’s grant aid programs such as construction of facilities and provision of equipment and materials for development projects, conduct of training programs for Filipinos, and dispatch of Korean experts and volunteers to the Philippines.
Signed on the occasion of Korean President Lee Myung-bak’s state visit to the Philippines, the agreement will support the achievement of the development goals of the Philippines and further strengthen the friendship and cooperation between the two countries.
The National Economic and Development Authority (NEDA) and KOICA) will be the implementing agencies.