MANILA, Philippines – Based on robust economic growth in the last quarter of 2014, JPMorgan Chase & Co. has increased its growth forecast for the Philippine economy in 2015. The New York-based financial institution raised its outlook for the country to 6.4 percent from its initial forecast of 5.4 percent growth this year.
“While we expect some technical payback for the very strong fourth quarter 2014 performance in the first three months of 2015, the underlying growth trend remains firm,” said. JPMorgan chief Asean economist Sin Beng Ong.
Ong said that the dynamics of this positive growth are reflective of many factors, such as:
• a tangible change in business outlook (as seen in business surveys and private investment)\
• low in domestic interest rates
• accommodative credit conditions
• boost in exports
• lower inflation due to lower cost of energy
The economist noted that these factors will strengthen domestic demand, enhanced by the PPP (Public-Private Partnership) infrastructure spending.
JP Morgan, however, cautioned against being complacent about the issue of port congestion, which has not fully normalized, and the backlog of which has not been fully resolved.
“Whether this will constrain growth this year remains to be seen,” the financial institution added, in reference to the havoc the port problem wreaked on the imports industry in 2014.
The Philippine economy grew by 6.9-percent in the last quarter of 2014.
The government targets a seven- to eight-percent growth range for both 2015 and 2016.