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PH Economy to See Downgrades due to Slow Q3

by: Sarah Joson

Friday, November 28, 2014 | Outsourcing News |

Lower Forecasts Anticipated for the Philippines

According to the Philippine government, Standard & Poor’s (S&P) has lowered its primary forecast for the country this year and tagged a downside risk to full-year economic growth due to slow activity in the third quarter.

Two more banks were seen downgrading their projections and another recently marked data as risk for the third quarter to its own predictions.

Before the local government released the official third-quarter gross domestic product (GDP) data, the credit rating agency said the economy could grow by 6.4 percent this year, which is lower than their 6.6 percent projection last September. This is according to the report "Economic Research: Asia-Pacific Economies Limp Toward Higher-Quality Growth".

The report also included several adjustments from S&P where the 6.2 percent growth forecast for 2015 is changed to 6.3 percent and 2016’s growth will be a bit slower from 6.4 to 6.0 percent.

However, the report did not cover the 5.3% GDP growth posted last quarter, which is a huge setback from the 6.4 percent in the second quarter, and seven percent recorded during the July-September period last year. In BusinessWorld’s survey last week, 14 economists and bankers revealed that the official result is lower than their 6.5 percent average estimate.

In a phone interview, S&P Economist Vincent R. Conti said the credit rating agency is maintaining their growth projections for the meantime despite the fact that the third-quarter slowdown is tagged as "downside risk" to the revised outlook.

In the same way, DBS Bank Ltd. Economist Gundy Cahyadi stated that they will be revising the GDP growth outlook for this year and 2015. He added that the overall GDP growth for this year will be lower than six percent.


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