The investment banking arm of the Metrobank Group expects the Philippine economy to recover with a growth of 5 to 6 percent by the end of the year, reversing the 9.6-percent contraction in 2020 amid the pandemic.
The First Metro Investment Corporation (FMIC) sees the faster global economic recovery, accelerated vaccine mobilization, sustained supportive fiscal and monetary policies, and the government’s commitment to push infrastructure projects fueling this year’s growth.
“Our dependable and resilient OFW (overseas Filipino workers) remittances, which grew 13 percent year-on-year in April this year, and BPO (business process outsourcing) services are anticipated to perform even better. As employment starts to pick-up and more people get inoculated, consumer confidence is also expected to improve,” FMIC president Jose Patricio Dumlao said in a virtual press briefing Wednesday.
Dumlao said the upcoming election next year is also anticipated to support growth.
“We are seeing a lot of positive signs and reasons to believe that the country is on its way to recovery but it is not to say that we should let our guards down. Still, the biggest risk to our outlook is the uncertain course of the pandemic. We should continue to be cautious and mindful and do our share in controlling the spread of the virus,” he added.
University of Asia and the Pacific (UA&P) economist Dr. Victor Abola said the investment banking arm’s growth forecast for this year slightly follows the government’s growth target range of 6 to 7 percent.
Abola said the industry sector, which is expected to rebound to 13.5 percent this year from last year’s -13.2 percent, will mainly boost the country’s gross domestic product (GDP).
“Public construction has been accelerating (amid) the determination of the government to make it a booster for the economy,” he said.
Abola is optimistic that economy will register better growth figures starting in the second quarter with the recovery in the manufacturing sector, as well as exports and capital goods imports
He added the services sector can post growth of only 3 percent in 2021 from -9.2 percent last year amid the pandemic.
The FMIC last January made a growth forecast of 5.5 to 6.5 percent for this year with sustained government spending and the rollout of coronavirus vaccines.
Abola attributed the slight downward revision of this year’s economic growth forecast to the negative growth in the first quarter due to resurgence of the coronavirus disease 2019 (Covid-19) cases.
The Philippine economy shrank at a slower pace in the January to March period of 4.2 percent but was expected to stage a recovery in the following quarters.