Upbeat
No. 03.11.14 ď Žď Ž No. 2105 10.30.2008
PHL growth forecast raises in 2014 American financial services giant JP Morgan forecasts the Philippine economy to expand at a faster pace than previously thought in 2014.
JP Morgan in a research report raised up its gross domestic product (GDP) growth forecast for the Philippines to 6.6%, or one percentage point higher than its outlook three months ago. Although the new GDP forecast is slower than the 7.2% growth posted in 2013, which was an election year, the growth forecast is two percentage points better than the average forecast for emerging market peers and not too far from the 6.5-% consensus outlook. T rade and Industry Information Center Makati City, Philippines Tel.: (632) 895.3611 Fax: (632) 895.6487 publications@dti.gov.ph Copies available upon request.
JP Morgan said it expected economic momentum as measured by quarter-on-quarter seasonally adjusted GDP growth annual rate firming up at 8.7% this first quarter of the year before easing to 5.3% in the second quarter. Quarter-on-quarter growth is seen picking up to 6.6% in the third quarter and 7% in the last three months of 2014. “We believe that robust macro growth will translate to earnings per share (EPS) growth surprise this year; we think banks will be the catalysts,” JP Morgan Philippines Head of Research Jeanette Yutan said. “Domestic demand growth is robust. Government spending momentum is intact while capital expenditure cycle is seen across the major Philippine conglomerates,” Yutan said in the research note. Overseas Filipino remittances and the robust business process outsourcing (BPO) sector remain key domestic growth drivers, the study said. JP Morgan included the Philippines and Indonesia in the roster of nine emerging markets where it has an “overweight” rating, suggesting an increase in position in excess of key benchmarks. The other favored emerging markets are Korea, Taiwan, India, Thailand, Russia, Greece, and Peru.