by: Karen Cayamanda
Monday, February 22, 2016 |
This year and in 2017, Hong Kong Shanghai Banking Corp. (HSBC) predicts that the Philippine economy would post growth of 5.8 percent, driven by an increase in government spending. This is slightly higher than its projection last month which was 5.7 percent.
Both forecasts are lower than the government targets which are 6.8-7.8 percent for 2016, and 6.6-7.6 percent in 2017.
HSBC economist Joseph Incalcaterra said growth in both services and industry makes up for the decrease in agricultural outputs as a result of the El Niño phenomenon. Last year, strong government spending propelled the gross domestic product (GDP), especially in the fourth quarter where it grew by 6.3 percent. Incalcaterra said while this fell short of the government target of six percent, the country remains to outperform its peers in Asia. He added that government spending is expected to continue to post strong growth in the first six months of this year.
As for remittances from Filipinos working abroad, HSBC sees moderate growth, following the 3.7 percent posted last November. Slow growth is predicted in remittances, but these would still contribute to economic growth. Meanwhile, the Bangko Sentral ng Pilipinas (BSP) expects remittances to post a four-percent increase until 2019.
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