World Bank sees 6.9% growth of Philippine economy

The World Bank (WB) has projected a 6.9 percent growth of the Philippine economy, reflecting the current construction boom following the devastation caused by the natural disasters.
The WB forecast was slightly lower than the government’s growth target of 7 percent last year with  a projected decline in the first quarter of 2014 following the damage caused by typhoon Yolanda.
The WB report noted that typhoon Yolanda had a large humanitarian impact and has cut deeply into the activities in Central Visayas but its impact on the country’s overall economic growth is likely to be limited, reflecting about a 0.9 percent decline in growth in the fourth quarter of 2013, leading to a marginal 0.2 percentage point fall in annual growth rate compared with pre-crisis projections.
Dollar remittances expanded by an estimated 5.8 percent in 2013 and would likely accelerate in the wake of the typhoon.
The WB report stressed the need to undertake structural reforms and re-balance the economy from its excessive dependence on consumption, while at the same time prioritizing investment, to rebuild the typhoon –stricken portions of the economy.
“Careful management of fiscal levers may be requested to direct spending toward the affected areas and away from overheating sectors elsewhere,” the report added.
In its latest global economic outlook, the WB reported a growth moderation of 7.2 percent in 2013 in the East Asia and the Pacific region from 7.4 percent in 2012.
Growth in China was unchanged from the 7.7 percent recorded in 2012.A one percentage point slowdown in growth in the rest of the region reflected a moderation of economic activity in
Indonesia, Malaysia, Thailand and a sharp slowdown in Papua New Guinea that resulted from completion of construction of a major liquid gas facility.
 Because output in the region was capacity-constrained at the onset of the 2008–09 crisis, domestic policy induced a quick rebound from the economic slowdown in 2009, leaving output in the region close to or above capacity, the WB report said.
“Continued fiscal and monetary stimulus in the post-crisis period combined with the strong foreign inflows exacerbated imbalances, leading to a rapid expansion of credit, deteriorating current account positions, and growing asset price pressures in several countries between 2007 and 2012.”
The WB report expects global GDP growth to gradually firm from 2.4 percent to 3.5 percent in 2016. Global trade flows are also projected to recover from their current low levels of 3.1 percent to 5.1 percent by 2016.
Increased trade will particularly benefit exporters of manufacturing products and services in China, Malaysia, Pacific Islands, the Philippines, Thailand and economies with relatively low unit labor costs and competitive exchange rates in Cambodia, Lao PDR,Myanmar and Vietnam.
Declining commodity prices are however, projected to weigh on for commodity exporters in Indonesia, Malaysia, Mongolia, and Papua New Guinea.
Full-year growth for China is expected to remain at around 7.7 percent in 2014, but the quarterly pace should slow somewhat toward the second half of the year, with growth projected to stabilize at around 7.5 percent in 2015 and 2016, the report said.
The WB also expects growth in the rest of the region would also  be broadly stable in 2014 but is projected to pick up in 2015 to 5.7 percent reflecting modest acceleration in Indonesia and Thailand, reconstruction efforts in the Philippines, and the start of production of Papua New Guinea Liquefied Gas before settling at 5.5 percent in 2016.

Philippine tourism to reach P1.2 trillion

The Department of Tourism (DOT) is projecting revenues from domestic tourism to hit P1.4 trillion in 2014, higher by P110.6 billion compared to 2013 earnings due to the projected increase in the daily expenditures by domestic tourists.
The DOT estimates domestic tourists to reach 47.7 million in 2014 up from 44.1 million in 2013. The average length of stay of local tourists remains at approximately five nights.
The increasing number of local travelers could be attributed to the promotions and expositions being held by the Philippine Travel Agencies Association (PTAA) which has been organizing the annual Traveltour Expo to be held this year at the SMX Convention Center in Pasay City on February 14 to 16.
The PTAA has been holding travel tour expo since 1993 varying from inbound and outbound expos until it decided to promote both inbound and outbound tourism in the latter years, said TTE Executive Director Marciano Ragaza.
Previous editions of the expo have seen an increasing presence of domestic tourism suppliers such as local airlines, domestic tour operators, hotels and resorts in the various islands as well as provincial tourism councils which showcase the various destinations around the Philippines. Very affordable offers and unique packages await those looking to see discover more of the islands.
The 21st Traveltour Expo, which promises to be the biggest and most diverse in terms of exhibitors, will be held at Halls 1 to 4 at the ground floor of SMX and the Function Room 5 at the 2nd Floor and will feature a total exhibition area of 11,480 square meters.
The expo will feature 53 travel agencies and tour operators, 27 airlines, five cruise lines, 96 hotels and resorts, 14 embassies and travel organizations and six theme parks.

ESCAP forecasts Philippine economy to grow by 6.7%

The UN Economic and Social Commission for Asia and the Pacific (ESCAP) forecasts the Philippines’ gross domestic product (GDP) growing by 6.7 percent this year, making it the second fastest growing economy in the Asia-Pacific region next to China.
ESCAP expects the Philippine economy to sustain its robust growth in 2014 and could further accelerate due to the reconstruction activities in the aftermath of typhoon Yolanda.

ESCAP noted that remittances would continue to serve as a stable source of support for the Philippine economy given the better outlook for receiving countries as well as the general lack of short-term volatility in remittance flows. 

ESCAP considered the economic performance of the Philippines a “bright spot” among the major economies with large domestic markets in the region.

The Philippines has seen its highest growth in years -above 7 percent in the last four quarters through the third quarter of 2013.

“The role of remittances in supporting buoyant domestic consumption in the country has been important,” ESCAP said.

ESCAP also cited the robust investments in the country, the benign inflation and a relatively low budget deficit that allowed for substantial government spending this year in infrastructure and other basic services. 

“The prospects are positive in 2014, despite the losses resulting from Typhoon Haiyan in 2013. Concerns remain, however, regarding the high unemployment rate and relatively low investment level compared to other similar South-East Asian economies,” it added. 

Meanwhile, the ESCAP also sees improving prospects for growth of developing Asia and the Pacific, which is forecast to expand by 5.6 percent in 2014 from an expected 5.2 percent this year.

ESCAP said the projected growth, however, depends on the gradual recovery in developed economies, particularly an increase in growth momentum in the United States, expansion in Japan and progression to positive growth territory of the European Union.   

 “If the positive outlook in the advanced economies does materialize, import volume growth by these economies is expected to reach a three-year high in 2014. Growth performance in developing economies is thus expected to resume some strength after a sluggish 2013,” ESCAP said.