September 11, 2019
FITCH Ratings has maintained its 6.1-percent growth forecast for the Philippine economy this year as it expects it to bounce back in the second half.
In a report released on Tuesday, the global credit ratings agency said the figure kept the country among “the fastest-growing economies” in the Asia-Pacific region.
The projected figure falls within the government’s downwardly revised 6- to 7-percent gross domestic product (GDP) growth target range.
Fitch also said it “expects growth to improve in 2H19 [second half of 2019] following a weak first half. Growth was weighed down by the delay in budget implementation and a weak external environment.”
The government earlier reported that the country’s GDP expansion slowed to 5.5 percent in the second quarter, bringing growth in the first half of the year to 5.5 percent.
A dispute between the Senate and the House of Representatives over alleged insertions resulted in the four-and-a-half-month delay in the passage of this year’s budget. This forced the government to run on last year’s outlay, limiting it to spend for items detailed in the 2018 appropriations and not on programs and projects supposed to be implemented this year.
Fitch also believes that the tight monetary policy and slowing growth momentum last year “have lowered overheating risks” for the economy.
The Bangko Sentral ng Pilipinas implemented a cumulative rate hikes of 175 basis last year, when the country’s economic growth slowed to 6.2 percent from 6.7 percent in 2017.
On the country’s average inflation rate, the debt watcher expects it to slow to 3.1 percent this year from 5.2 percent in 2018.
Its inflation forecast fell within the 2- to 4-percent official target range of the government, but was higher than the 2.6-percent forecast of the central bank.
Year-to-date average inflation rate now stands at 3.0 percent following the three-year-low 1.7-percent print in August.
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