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.