MANILA -- Investment bank UBS expects the Philippine economic growth to remain above 6 percent this year and will likely hit 7 percent in 2020, as the country benefits from supply chain relocation resulting from trade issues between China and the United States.
Citing result of UBS Evidence Lab survey of 200 exporters in China, UBS Investment Bank senior ASEAN economist Edward Teather said Southeast Asia and Philippines “was much more popular” for planned production shifts.
In an interview on Wednesday, Teather noted that shifting supply chains will deliver some benefits to the Philippines.
Teather said Philippine economic growth, which is growing faster than most of the Southeast Asian countries, is the country’s key advantage in attracting more investments.
“The fundamental growth, inflation, interest rates and of course policy in terms of budget and making easier to firms to come and do business here so that’s where investments will be based on,” he said.
In 2019, Teather considered foreign direct investment (FDI) and the government’s "Build, Build, Build" program as important economic drivers.
“Inflation is also likely to fall to around 3 percent by end year with the government assistance in stabilizing food prices. These are all good signs for consumers as we foresee continued support from the government in embracing Philippines’ infrastructural story and future growth potential. The country is also equipped with alternative sources of income rise such as tourism revenues, which would be positive for its economic outlook in the long run,” he added.
UBS Head of Philippines Research Jody Santiago, meanwhile, said consumption spending used to be the only driver of the country’s economic growth.
“We will now have ‘three legs’ (driver) which are consumption recovering from the low base, spending where government is now potentially doubling the infrastructure (spending) as a percentage of GDP (gross domestic product), and FDIs from China and Japan which we did not have before,” he said in a press briefing.
The country’s GDP grew by 6.2 percent last year.
The UBS is hosting its flagship Philippines CEO/CFO (Chief Executive Officer/Chief Financial Officer) Conference in Manila from February 27 to March 1 focusing on investment themes and ideas after a challenging year in 2018. (PNA)
