MANILA — GlobalSource Partners, a think tank based in New York, raised its evaluation of the Philippine economic growth forecast to 6.1 percent after a good second quarter performance of the country.
The said figure is a notch higher than the earlier prediction of 5.8 in July.
“We think the economy is not yet out of the woods in terms of bearing the costs of port congestion, which will feed into prices and economic activity in the second half of 2014,” analysts Romeo Bernardo and Christine Tang said in a market brief.
Bernardo and Tang added, “Although the Planning Secretary continues to see a ‘strong likelihood’ of attaining the government’s 6.5 to 7.5 percent target for the year, at this time we can only concede a return to our start-of-the-year 6.1 percent forecast from 5.8 percent for 2014 due mainly to the better second quarter growth performance,”
While the local economy grew at a slower pace compared in the same period last year, it is still considerably faster than the growth rate during the first quarter of the year which is at 5.6 percent.
“We anticipated this given rising prices, especially of food. We are expecting this to slow down further as supply-side pressures continue to keep inflation elevated,” the analysts said.
“In particular, the two main sources of supply side risks at this time are reduced rice stocks, especially following a failed auction to bring in rice imports by September, and increased production costs due to port congestion that has yet to be satisfactorily resolved,” they added.
The 13 percent drop in public construction to “implementation bottlenecks” is also something to be considered, according to Bernardo and Tang.