Citigroup sees a downtrend in Philippine GDP for 2H 2010
Following the announcement of unexpected Philippine economy growth for the first half this year, Citigroup expressed skepticism saying that the country’s gross domestic product (GDP) would slow down this second half to 5.6 percent.
Citigroup economist Jun Trinidad said Thursday that the Philippines would have a moderate downtrend in expenditures and production with which the second half 2010 growth may settle at 5.6 percent.
If the infrastructure development in the first half would continue to support its investment activities, an average of P80 billion a year translates to roughly 5 percent of GDP next year, increasing the overall 2011 GDP growth from 9 to 10 percent.
“ So infrastructure development under the public-private partnership could provide the upside risk in our forecasts in case the Aquino administration’s pursuit of governance ideals lead to an investment setting that can entice more private capital participation and support the shift to investment-driven growth over the medium-term," Trinidad said.
Bangko Sentral ng Pilipinas (BSP) is expected to tweak its policy rates this year and the Monetary Board may hike overnight rates later in the year due to potential increase in inflation, Citigroup says.
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