DBS, BPI downgrade PH GDP forecast
Singapore-based DBS Bank Ltd. and Ayala-led Bank of the Philippine Islands (BPI) lowered their Gross Domestic Product (GDP) growth forecasts for the Philippines due to slower Q2 growth and the expected slowdown in the second half of the year.
DBS Bank economist Chua Han Teng said their forecast went down from 7.5% to seven per cent to reflect “the deceleration in the second quarter and rising cost headwinds in the second half.”
Teng explained that the second half of the year “will likely be tougher” than the 7.8% year-on-year growth of the first half due to inflation and other economic factors.
Likewise, BPI also downgraded its GDP growth forecast from 6.7% to 6.3%, given the fading base effects and the impact of inflation.
“A sharp slowdown can be avoided, however, if the return of students to face-to-face classes and higher uptake in booster shots are seen in the coming months to boost the performance in the second half,” said BPI senior economist Jun Neri.
The Bangko Sentral ng Pilipinas (BSP) is expected to maintain its “hawkish” stance for the rest of the year after raising key policy rates by 125 basis points, bringing the reverse repurchase rate to 3.25% from an all-time low of two percent.
