Dutch financial giant ING Bank expects the Philippine economy to recover with a 6.4-percent growth in the second half as the government accelerates infrastructure spending.
ING said in its latest economic and financial analysis report on Aug. 19 that the Philippine economy still had a chance to reach the low end of the target range of 6 percent to 7 percent this year.
The economy expanded by a slower-than-expected 5.6 percent in the first half following the delay in the approval of the 2019 government budget.
ING said that for the third quarter, the Philippines would continue to outperform other economies in the Asean region by growing 6.4 percent.
This would be faster than the 3-percent forecast for Thailand, 0.2 percent for Singapore, 4.7 percent for Malaysia and 5.2 percent for Indonesia.
The bank said the Philippines was expected to grow in the fourth quarter by 6.4 percent, faster than 3 percent for Thailand, 1.4 percent for Singapore, 4.6 percent for Malaysia and 5.3 percent for Indonesia.
It said for 2020 and 2021, the Philippine economy was also expected to grow by 6.4 percent, outperforming China’s 6.2 and 6.3 percent, and next to India’s 7 percent and 7.1 percent, respectively.
ING Bank Manila senior economist Nicholas Mapa earlier said with the recent string of monetary easing by the Bangko Sentral ng Pilipinas and government spending back online in the second half, “the Philippines will look to finish the year strongly, with growth fueled by all sectors of the economy to get it above 6 percent by the end of the year.”
Economic growth in the second quarter slowed to a four-year low of 5.5 percent from 5.6 percent in the first quarter and 6.2 percent a year ago, weighed down by the El Niño dry spell, rising protectionism in advanced economies, delay in the approval of the national budget for 2019 and the ban on construction activities in the run-up to the midterm elections in May.
The sluggish expansion for the April-to-June period was the slowest since the 5.1-percent GDP expansion in the first quarter of 2015. It was also the second successive quarter that economic growth fell below 6 percent.
This brought the first-half GDP growth to just 5.6 percent, below the low-end of the target range.
Economic Planning Secretary Ernesto Pernia said the economy needed to grow by at least 6.4 percent in the second half to reach the low-end of the government’s target range.