August 15, 2014

Quarterly Forecast: Philippines Economy in 2014

Philippines Economy 2014

Philippines economy post 5.71% QoQ growth in first quarter of year 2014 according to National Statistical Coordination Board (NSCB). The growth is still one of the highest in Asia; it is projected that the economy will bounce back to 6.85% in the second quarter. 

Overall, Q3 and Q4 are projected to remain on high levels at 5.72% and 6.82% respectively. From previous forecast of 6.50% (see article Philippines 2014: On Steady Side), Philippine Economist reduced the full year forecast to 6.30% due to significant change in some macro-economic assumptions. 

While the government strides to build the infrastructure, the speed required is not catching up. Further more, investigation of those involved in the government corruption were slowing down the execution of the projects. Yet, if the investigation were done well the long term effect in the economy could be significant. 

The shortage in energy was already projected in the past, it is in the hope that the utility plants will start working on 2016. In effect, investment in manufacturing sector is seen to have less growth.

Consumer confidence remains high despite the increase in the prices of goods. Some major companies in the country ripped huge profit in first haft of the year; like, car and real estate companies. 

While, overseas work is seen to slow down, service sector is seen to be stable.

Philippines could achieved higher growths if resources were managed well. If manufacturing is affected by energy shortage, why not focus on agriculture? In this sense, concentration is not wasted.

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