By Kathleen Martin (The Philippine
Star) | Updated March 8, 2014 - 12:00am
MANILA, Philippines - The economy will
continue to grow at an “above-trend” pace, the Bangko Sentral ng Pilipinas
said, citing a number of indicators led by the robust consumer demand.
“Newly available data suggest that the
growth of the domestic economy is likely to continue at an above-trend pace,
although capital flow volatility can create some challenges to financial
markets in the near term,” the central bank said in its latest Highlights of
the Meeting of the Monetary Board.
“The Philippine economy continued to
expand at an above-trend rate in Q4 (fourth quarter) 2013, driven by strong
household spending, exports, and capital formation on the expenditure side, and
by solid gains in the services sector on the production side,” the BSP added.
The economy expanded by 6.5 percent in
the fourth quarter, marking the eighth quarter it has grown above six percent.
This brought last year’s growth to 7.2
percent, surpassing the government’s target of a six to seven percent.
“The positive outlook for economic
activity is expected to continue on the strength of consumer spending, as
evidenced by the trend of various demand indicators,” the central bank said.
The government hopes to grow the
economy by 6.5 to 7.5 percent this year and analysts have noted the strong
inflows of remittances which last year accounted for almost 10 percent of the
gross domestic product (GDP) will continue to support domestic consumption.
“Labor market conditions likewise
improved, with the unemployment rate at 6.5 percent based on the results of the
October 2013 Labor Force Survey from 7.3 percent in the previous quarter,” the
BSP said.
“Meanwhile, manufacturing activity and
exports have likewise been improving with the normalization of global trade,”
the central bank added.
The International Monetary Fund, in
its World Economic Outlook Update in January, has said recovery in advanced
economies will drive global economic activity. The BSP noted that this will
spur export demand and heighten trade activity.
“Consistent with these developments,
results of the latest Senior Loan Officers’ Survey for Q4 2013 point to a
sustained net increase in demand for loans from both enterprises and households,”
the BSP noted.
“The outlook for domestic demand
conditions is also likely to benefit from typhoon-related reconstruction and
rehabilitation spending in 2014,” the central bank continued.
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