by: Sarah Joson
Tuesday, September 22, 2015 |
In a report created by Deutsche Bank called “Philippines Monthly: The bright spot in EM” (emerging markets), the country is said to be on a positive track as it continues grow despite external shocks such as global financial volatility.
The report noted that last month, when the central bank of China devalued the Yuan, local financial markets fell and became unstable, which was not entirely the case for the Philippines. The bank cited the country’s strong macroeconomic fundamentals and small bond and equity exchanges as equalizers during the sell-off and helped the country perform better among emerging markets.
The first six months of this year posted a 5.3% growth which is lower than the 6.2% posted last year, and is still far from the government’s 7-8% full-year target. Even with the slow growth, the bank says it continues to face positive growth prospects, while neighboring peers are at risk of slowing down.
Deutsche Bank also noted that at least $2 billion of remittances every month, better job prospects from the services sector, and more recently, lower commodity prices are driving private consumption and investments. Apart from necessities, private consumption is seen rising in to the non-essential items, as well as transportation, education, and health.
The bank is expecting the economy to grow 6% this year, and 6.5% next year.
Meanwhile, Bangko Sentral ng Pilipinas (BSP) is set to reinforce the peso with ample reserves so it is not affected by depreciation pressures. Key drivers of the country’s reserves are continuous inflows from overseas Filipino remittances and revenue from the business process outsourcing industry.
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