Imports of capital goods rose by 14% in 2012, a sign of positive business sentiment. Bank lending for production rose by 15.2% in February 2013 from a year earlier (Figure 3.28.8), and the buoyant st...
ock market has facilitated corporate expansion.
For the first time, the country achieved an investment grade credit
rating in March 2013, bolstering the investment climate. Fitch raised
its sovereign rating on long-term foreign-currency denominated debt
to BBB– from BB+. It cited the Philippines’ strong external balance
sheet, resilient economy, improved fiscal management, and decline in
government debt relative to GDP.
Fiscal spending will support economic growth, although not to the
extent seen in 2012 when it rebounded from low levels. Government
spending is programmed to rise by 13% in 2013, excluding interest
payments. Reforms to speed up budget spending are making progress.
Revenue is benefiting from higher taxes on tobacco and alcohol, effective
January 2013, which will contribute to the goal of reining in the budget
deficit to 2.0% of GDP in 2013–2016.
Robust consumption and investment and election-related spending
bode well for expansion in the service sector. The BPO subsector is
projected to grow by about 20% annually through 2016. The government
is targeting large increases in tourist arrivals, from 4.3 million last year
to 10.0 million by 2016. To support that aim, it is investing in tourism-
related infrastructure and encouraging the expansion of air services.
Growth in manufacturing production quickened in the second
half of 2012, and exports of semiconductors turned up late in the year.
Construction is expected to maintain solid growth. High demand for
housing and office space is spurring private construction, supported by low
interest rates. The government has raised its budget for infrastructure in
2013 and a program to create public–private partnerships for infrastructure
development, which started sluggishly, is gathering some momentum.
A projected pickup in exports of electronics will contribute to
growth in merchandise exports in 2013. Rapidly growing Southeast Asian
markets now buy 19% of the Philippines’ exports, up from just 13% in
2008. However, robust domestic demand suggests that imports will be
considerably higher, so that net external demand weighs on GDP growth
Source: CEIC Data Company (accessed 3 April 2013). - ( http://www.ceicdata.com/countrydata?country=PH&dataset=Consumer%20Price%20Index%3A%20Y-o-Y%20Growth )
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