A New York-based think-tank has downgraded its 2011 and 2012 economic growth forecasts for the Philippines amid the perceived recession in the United States and the European sovereign debt crisis.
In its latest quarterly report titled “Philippines: Not Immune,” think-tank Global Source lowered its gross domestic product (GDP) growth forecast for the Philippines to 4.3 percent from 4.8 percent this year, and to 4.8 percent from 5.5 percent in 2012, with the global outlook having become infinitely gloomier over the past couple of months.
“This puts a heavy cloud over the Philippine economy, whose fortunes are still in some ways tied to these countries, and opens up another period of uncertain growth,” the think-tank said.
The Philippines’ economic activity will remain mainly consumption-driven with the country’s merchandise exports likely to decline this year, Global Source said.
Government spending on infrastructure will also remain weak, it added.
Global Source, however, noted that the Philippines will remain resilient amid robust domestic demand, strong remittances from migrant workers, heavy inflows from business process outsourcing, record-high gross international reserves, and a healthy banking sector.
“In the worst case where European debt troubles coupled by US weakness lead to another global financial crisis of the same scale as 2008, the Philippines could remain as resilient to recession and financial volatility as it had been back then,” the company said.
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By: PE
Source: GMA News, Oct. 5, 2011
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