Malaysia’s RAM Rating Services Berhad expects a 6.7% growth for the Philippines’ economy this year. The growth forecast is lower than last year’s 6.9% but within the target set by the Cabinet-level Development Budget Coordination Committee (DBCC).
“On the demand side, continuous investments in durable equipment and a surge in exports had sustained growth at 6.4 percent in first half. While first half year-on-year growth had moderated slightly, partly reflecting a base effect from election spending last year, the Philippines remains one of the strongest performers among emerging and developing Asian countries in terms of growth, second only to China,” RAM Rating said.
The current administration has launched the Build Build Build program committed to spending roughly P8 trillion.
Aside from infrastructure development, according to RAM Rating, the country’s domestic growth fundamentals stayed steady, sustained by remittances and a boost in the manufacturing sector. Nevertheless, RAM Rating said that the services industry remained the main contributor to growth, driven largely by trade, business process outsourcing (BPO), finance and real estate.
A “positive” outlook means that the Philippines’ current global scale rating of BBB3 and regional scale rating of A1 from RAM Ratings may have chances of getting better over the short term.