PHL unlikely to meet 2018 economic growth target —BDO Macroeconomic Research

The Philippines is unlikely to meet its downward-revised economic growth target for the year due to dampened spending and export growth, according to BDO Macroeconomic Research.

Based on BDO's Philippine Macro Outlook 2019 report released on Monday, the country's economy is expected to grow by 6.2 percent this year, short of the already downward revised government target range of 6.5 to 6.9 percent.

"While demographics and the labour market point to rosy long-term consumption growth prospects, one important lesson we have learned in 2018 is that household consumption may not be as resilient to higher inflation, and is particularly vulnerable to global crude oil price surges," it said.

According to the latest data available, inflation clocked in at 6.0 percent in November. Prior to this, however, inflation was registered at 6.7 percent in October, the fastest in nine years.

For 2019, BDO said it expects GDP growth at 6.1 percent, also shy of the government target of 7.0 to 8.0 percent.

"We expect a modest slowdown in GDP growth to 6.1 percent year=on-year in 2019," said BDO.

"Rising interest rates should continue to weigh on rate-sensitive consumption and investment spending, while slowing global growth could put on a cap on export growth," it added.

The Monetary Board (MB) of the BSP has hiked rates five consecutive times this year, tightening rates by a cumulative 175 basis points, given the inflationary concerns. —KBK, GMA News
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