Phl 2012 GDP could hit 5.2% -Moody's

Growth could hit 5.2 percent this year as strong domestic demand keeps the Philippines afloat amid the persistent weakness of the global economy, a unit of debt watcher Moody’s Investors Service said on Friday.

“We recently revised our outlook for the Philippines to 5.2 percent from 4.7 percent. The first half economic growth was pretty strong,” said Katrina Ell, analyst at the New York-based Moody’s Analytics.

The five-percent forecast for next year has been retained, she added.

The local economy expanded by 6.1 percent during the first half of the year, a far cry from the 4.2 percent recorded same period last year. This also slightly surpassed the government’s five- to six-percent target for the year.

The revision was the second for the Philippines under Moody’s watch. The credit rater initially expected economic growth to hit only four percent this year. This was revised upwards to 4.7 percent in June after a surprising 6.4 percent first quarter growth.

Ell said strong consumption and accelerated government spending have boosted domestic demand, which “sort of overcame” the weakness of the external environment.

“Basically, we have factored in the weakness of the exports but that was sort of overcame by domestic strength,” Ell said in a phone interview. Merchandise exports plunged nine percent in August, its weakest performance in eight months.

“Risks to growth for the Philippines will be if the external weakness takes a turn for the worse, in effect, remittance could go lower,” she said. -Black Pearl (October 12, 2012 5:54PM)