MANILA – The investment banking arm of the Metrobank group expects the Philippine economy to recover with 5-6% growth by the end of the year, reversing the 9.6% contraction in 2020 in the midst of the pandemic.
The First Metro Investment Corporation (FMIC) sees a faster global economic recovery, accelerated vaccine mobilization, sustained fiscal and monetary policies, and the government’s commitment to pushing the infrastructure projects fueling this year’s growth.
“Our reliable and resilient OFW (Filipino Overseas Workers) remittances, which grew 13% year-on-year in April of this year, and our BPO (Business Process Outsourcing) services should perform even better. As employment begins to pick up and more people are vaccinated, consumer confidence should also improve, ”FMIC President Jose Patricio Dumlao said on Wednesday at a virtual press briefing.
Dumlao said the upcoming elections next year should also support growth.
“We see a lot of positive signs and reason to believe that the country is on the road to recovery, but that doesn’t mean we should let our guard down. Yet the greatest risk to our outlook is the uncertain course of the pandemic. We must continue to be careful and attentive and do our part to control the spread of the virus, ”he added.
The University of Asia and the Pacific (UA&P) economist Dr Victor Abola said the investment bank’s growth forecast for this year slightly tracked the government’s growth target of 6 to 7%.
Abola said the industrial sector, which is expected to rebound to 13.5% this year from -13.2% last year, will primarily boost the country’s gross domestic product (GDP).
“Public construction has accelerated (in the middle) of the government’s determination to make it a booster for the economy,” he said.
Abola is optimistic that the economy will see better growth figures from the second quarter with the recovery of the manufacturing sector, as well as exports and imports of capital goods
He added that the service sector may show growth of just 3% in 2021 compared to -9.2% last year amid the pandemic.
The FMIC made last January a growth forecast of 5.5 to 6.5% for this year with sustained government spending and the deployment of vaccines against the coronavirus.
Abola attributed the slight downward revision in this year’s economic growth forecast to negative growth in the first quarter due to the resurgence of cases of coronavirus disease 2019 (Covid-19).
The Philippine economy contracted at a slower rate of 4.2% between January and March, but is expected to recover in the following quarters. (ANP)