MANILA, Philippines – The Philippines is expected to remain the fastest-growing economy in the Association of Southeast Asian Nations 6 (ASEAN-6) this year, thanks to rising infrastructure spending and domestic demand, said economists of Standard Chartered Global Research.
The bank's research team expects the Philippine economy to grow by 6.9% in 2016, and by 6.7% in 2017, fueled by the growing middle class, the boom in the business process outsourcing (BPO) industry, and the boost in public infrastructure spending.
"Infrastructure spending to come on board even more in 2017. Services sector, as always, is strong in 2016, 2017, and medium term," Chidu Narayanan, economist for Standard Chartered Asia, said in a media briefing in Makati City on Wednesday, January 25. (READ: PH economy to stand out in Asia in 2017 – HSBC)
But from 2018 to 2020, economists said Vietnam is seen to outgrow the Philippines in terms of gross domestic product (GDP) growth in the ASEAN-6. (READ: PH economy seen to grow 'as much as 8%' in 2017)
Asked why the bank sees a slowdown in the country's economic growth, Narayanan replied: "It is still very fast. [It's] above expectations from the market."
"Growth possibility is a bit slower than last year – headwinds, global issues. But the average is still very high. It's much faster than what has been the average of the last 5 years before 2016," he added.
The Philippines' GDP growth in 2016 will be released by the Philippine Statistics Authority on Thursday, January 26.
The Philippines was the fastest-growing major Asian economy in the first half of 2016, with its economic growth even outpacing Asian giant China.
Meanwhile, Standard Chartered Asia FX strategist Diva Devesh said the Philippine peso will likely trade above P50 during the 2nd quarter of 2017, before closing around P50.50 against the US dollar by the end of the year. – Rappler.com