Philippines: GDP slowed its pace in 2019 – UOB
|UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the recently published GDP figures in the Philippines.
Key Quotes
“The Philippines’ real GDP growth jumped to 6.4% y/y in 4Q19 (3Q19: revised down to 6.0% y/y from 6.2% y/y), a tad lower than our estimate (6.5% y/y) but matching Bloomberg consensus (6.4% y/y). It was largely thanks to the continued acceleration in government spending for infrastructure projects, decent private construction activities, and sustained household consumption amid benign inflation, accommodative monetary policy and overseas remittance inflows in 4Q19.”
“The 2019 full-year GDP growth came in at 5.9%, lower than our projection of 6.0% and missing the government’s revised target of 6.0%-6.5%. However, we expect the economy to hold up its expansion above 6.0% throughout 2020 amid residing global downside risks. Domestic drivers such as infrastructure projects, overseas remittance inflows, and accommodative monetary policy will continue to underpin the growth outlook. We maintain our 2020 full-year growth target at 6.5% (Official target: 6.5%-7.5%).”
“Having said that, we think a further improvement in the economy and a gradual rise in inflation will unlikely derail BSP’s plan to further unwind its past aggressive monetary policy tightening this year. Strong PHP against the USD and lingering external downside risks support further rate cuts by BSP over next few months. We reiterate our call for a 25bps rate cut to 3.75% at the 6 Feb MPC meeting before the window of opportunity narrows further.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.