Management officials of companies belonging to the Makati Business Club (MBC) are optimistic that GDP will grow faster this year on higher consumer spending, according to a survey.
According to the MBC’s first semester Executive Outlook Survey, 52 percent of senior business executives expect GDP to be higher than the 5.8 percent posted last year.
MBC Executive Director Peter V. Perfecto said this expectation is based on more robust domestic consumption.
“Although our survey results cannot specifically address the reason [for the outlook], GDP growth in the past few years has been fueled by domestic consumption and this is where the positive sentiments on the economy may be coming from,” Perfecto said.
“Businesses respond to demand which drives them to expand production and employ additional resources [including creating new jobs],” he added.
In January First Metro Investment Corp.-University of Asia and the Pacific (FMIC-UA&P) Capital Markets Research said a 10-percent increase in domestic demand for goods and services would result in a GDP growth of 6.5 percent for 2016.
FMIC-UA&P Capital Markets Research’s Vic Abola said that historically, domestic demand has been a major driver of the economy for a number of years despite facing headwinds in the global economy.
In 2013—also an election year—domestic demand grew 10.4 percent. Abola credited this to demand created in the wake of Supertyphoon Yolanda (international code name Haiyan), particularly in the last quarter of the year.
In 2014 and 2015 domestic demand posted grew by 4.7 percent and 8.5 percent, respectively.
Abola forecasted that consumption spending will post “strong” growth this year at 6.8 percent, while government spending is expected to increase by 10 percent. Both demand drivers are seen to pick up at their fastest pace in three years.
The increase in consumption spending in 2013, 2014 and 2015 were at 5.7 percent, 5.6 percent, and 6.2 percent, respectively. Government spending, meanwhile, posted a growth of 7.7 percent in 2013; 0.8 percent in 2014; and 8 percent in 2015.
Meanwhile, MBC also included in its first semester survey the wish list of priorities for the next administration; 57.75 percent of the respondents included infrastructure as an issue in their list, followed by corruption (40.85 percent), and peace and order (32.39 percent).
The survey, conducted from February 2 to March 16, registered 71 responses, or capturing 17.75 percent of MBC’s total membership of 400 companies. Eighty-seven percent of the respondents occupy top management positions