MANILA -- An official of Sun Life Financial - Philippines forecasts healthy expansion for the domestic economy in the last quarter of 2018 at 6.3 percent and sees even higher growth next year because of government spending and election-related spending.
In a briefing Monday, Sun Life Asset Management Chief Investments Officer Michael D. Enriquez said he also expects domestic growth to be propelled by a steady rise in investments.
He forecasts the full year 2018 growth, as measured by gross domestic product (GDP), at 6.1 percent and the 2019 figure to go higher to 6.4 percent.
In the first three quarters this year GDP grew by 6.3 percent, with the first to third quarter figures at 6.6 percent, 6.2 percent and 6.1 percent, respectively.
Authorities attributed the deceleration of domestic growth to the impact of mostly external developments like uptick of global oil prices in the third quarter and concerns on the trade war.
With these factors, economic managers revised the growth target this year to a range between 6.5-6.9 percent from the original 7 to 8 percent, which is also the target until 2022.
With domestic demand still robust amid the impact of external developments and the likely peaking of inflation rate, due to stabilizing prices of rice and oil, Enriquez said GDP is seen to reach 7 percent by 2020.
He forecasts inflation to go back to "within target levels" of two to four percent in the coming years, with the 2019 forecast at 4.1 percent and 2020 at three percent.
With inflation seen to normalize next year and growth remaining robust, Enriquez said the Philippine Stock Exchange index (PSEi) may breach the 8,000-level next year.
“We may see a lot of drivers on macro-front - GDP, fund inflows due to rebalancing, and peso stabilization,” he said, citing that higher earnings reports by listed companies will further boost the main index.
The peso is also seen to benefit from improvements of domestic developments after weakening to 54-level last October.
Enriquez said foreign funds are going back to the Philippines, particularly through the fixed income market, since “hesitation in the past is not there anymore.” (PNA)
