Rise in Consumer Spending! – Philippine economy set to increase by 4.7% in 2013
According to the UBS Securities Philippines, Inc., a local unit of Swiss bank UBS AG, the pace in which the Philippine economy’s grows will slow in 2012 before picking up again in 2013.
In figures recorded by the company, gross domestic product (GDP) reached 3.6% in 2011; however this number is set to drop slightly in 2012 to 3.3% before rising to 4.7% in 2013.
Executive Director of Investment Research, Jody M. Santiago, stated that higher domestic demand and consumer spending will aid the country’s economy in 2013, which will help push corporate income to rise and, as a result, will propel share prices.
“We are projecting negative growth for Europe next year. That will have a knock-on effect on Asian economies and on the Philippines,” Santiago stated.
The agency downgraded anew the GDP growth forecast for this year from the 4.1% announced in September, Robrina L. Go, managing director of UBS Securities, told reporters.
Originally the Philippines economy was set to grow by 4.1% in 2011, however this was downgraded due to a slower-than-expected government spending and the looming Eurozone crisis.
Statistics released by the National Statistical Coordination Board stated that despite the economic growth downgrade, local economy saw a rise of 3.6% in the first three quarters of the year.
“With the gestation period of infrastructure, spending takes time before you see it in the economy,” Mr. Santiago continued.
Planned infrastructure projects and an increase in government spending are also set to see a rise in H2 of 2012, according to Mr. Santiago.
In a bid to encourage growth, the UBS Securities predicts that the Bangko Sentral ng Pilipinas will reduce key rates by 50 basis points from the current overnight borrowing and lending rates of 4.5% and 6.5%, respectively.
Despite the dip in the country’s economic growth, large companies continue to earn the big bucks, which are helping to entice investors.
“We have a one-year Philippine Stock Exchange index (PSEi) target of 4,700, which largely reflects our estimate of 10% earnings growth for the market in 2012,” UBS Securities said in a statement yesterday.
Investors have been advised to keep an eye on companies that are into sunrise industries like tourism, infrastructure and mining. Bank stocks are also set to be attractive as well as investment in the property sector.
Filed Under: Business • Economy • news • Philippines Property
Everything will increase in 2013 by then, not just the economy, but also the prices of basic commodities, the number of people living below the poverty line. And I think it will take so many years to wipe government corruption as well. Please suggest me about it.
With property investment currently big business, it makes sense to weigh up the options and carefully consider a list of individual requirements before making any major decisions.