The Philippine economy is expected to strengthen its growth this year on the back of robust consumption and exports data.
“We expect more bubbly consumer spending in the coming quarters as a result of high job generation and drastically lower inflation due to the collapsing crude-oil prices,” said a joint report by the First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P).
It said that while the free-falling crude-oil prices have markedly changed the outlook for emerging countries, the Philippines is one of the countries predicted to benefit from the “new normal.”
Crude-oil prices have hit five-year lows and not expected to recover any time soon.
The latest issue of the Market Call noted that investments should also regain buoyancy as lower oil prices mean better profits.
“…And construction regains momentum with a bunch of large PPP [public-private partnership] projects finally taking off,” it said.
The government targets to roll out nine PPP projects with combined costs of P702.78 billion in 2015.
The FMIC and UA&P also expect sustained export expansion at double-digit pace this year, bolstered by low oil prices and the recovery of the US economy. The US is one the country’s largest export markets.
The report sees headline inflation averaging 2.4 percent in the first quarter of the year with the continuing weakness in crude-oil prices, which also impacts on food prices and other consumer goods.
“This low level of inflation is expected to span the whole of first half [of 2015],” it added.
Meanwhile, the FMIC and UA&P said the Philippine economy is poised for a recovery starting fourth quarter if the economic data released in December were to be replicated for the rest of the quarter.
The government will release its 2014 economic report this week.
Leslie D. Venzon | Philippines News Agency