By Lawrence Agcaoili (The Philippine
Star) | Updated May 20, 2016 - 12:00am
MANILA, Philippines - Standard and
Poor’s (S&P) Global Ratings said the underlying demographic trends in the
Philippines is expected to drive growth despite the changing of the guard in
Malacañang next month.
In a report, S&P retained its gross
domestic product (GDP) growth forecast for the Philippines at six percent this
year and 6.3 percent next year.
“With economic policy unlikely to change
significantly with the incoming president, underlying demographic trends will
continue to drive growth,” S&P said.
S&P said a growing and educated
middle class would continue to be absorbed by a combination of overseas
employment and a booming outsourcing industry.
This, it explained, would drive
consumption and investment even as external demand remains weak.
The country’s GDP growth slowed down to
5.8 percent last year from 6.1 percent in 2014 due to weak global demand and
low government spending.
Economic managers expect a GDP growth of
between 6.8 and 7.8 percent this year.
The international rating agency said the
eight-point economic agenda supports the reforms adopted by the outgoing
administration of President Aquino.
“From an economic policy standpoint, his
statements since the election have so far focused on maintaining the previous
administration’s infrastructure program via public private partnership, as well
as endeavoring to revise constitutional restrictions on foreign investment,”
S&P said.
The debt watcher noted the peso and the
stock markets have recovered after weakening substantially leading to the May 9
presidential and national elections.
Likewise, the amount of money sent home
by Filipinos working and living abroad continued to hold despite soft oil
prices that would take its toll on Filipinos in the Middle East.
Inflation averaged 1.1 percent in the
first four months, way below the two to four percent target set by the Bangko
Sentral ng Pilipinas (BSP).
S&P sees inflation rising to 2.5
percent this year and to 3.3 percent next year after easing to 1.4 percent last
year from 4.1 percent in 2014 due to stable food prices and cheaper utility
rates arising from soft oil prices.
S&P together with Moody’s Investors
Service, Nice Ratings, and R&I have assigned a one-notch above investment
grade rating on the country while Japan Credit Rating Agency has assigned a
credit rating of two notches above investment grade.
Fitch Ratings, on the other hand, has
kept the country’s credit rating at minimum investment grade but has assigned a
positive outlook in the Philippines.
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