RP's 2009 growth seen slowing to 8-year low
Reuters | 12/11/2008 4:52 PM
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The Philippine economy may post its slowest growth in eight years in 2009 as a global recession crimps export demand and domestic consumption shrinks due to lower remittances from workers overseas, a Reuters poll showed.
Ten economists polled by Reuters forecast gross domestic product would rise 3.3 percent in 2009, substantially lower than the 4.7 percent in a similar poll in September and below the government's estimate of 3.7-4.7 percent growth.
All economists revised down their 2009 forecasts to account for the impact of the worst financial crisis in decades on the export-driven country of 90 million people. Forecasts ranged from 0.7-4.1 percent for 2009.
"Our view that the Philippine economy will suffer a sharp slowdown remains as the global recession clearly gained pace in fourth quarter after the series of financial shocks in October," said Simon Wong, an economist with Standard Chartered Bank in Hong Kong, said.
"As such, we expect Philippine exports to contract in coming months and well into the first half of 2009 and remittance growth to slow to low single-digit in 2009, thus cooling off domestic consumption," Wong said.
The International Monetary Fund has forecast growth to slow to 3.5 percent next year after 4.4 percent projected for this year.
The Reuters poll forecasts 2010 growth at 4.8 percent.
The Philippine economy grew 7.2 percent in 2007, its strongest pace in three decades.
Remittances from Filipinos working overseas has played a large part in driving domestic consumption. They are still growing at double-digit pace but growth could slow to as low as 6 percent in 2009, central bank documents over the weekend showed.
Falling fuel prices are expected to reduce inflation to an average of 4.9 percent in 2009 from 9.5 percent this year, the poll showed. The Philippines imports nearly all of its crude oil needs.
Some economists expect monetary authorities to follow central banks around the world in cutting rates as early as this month to help shield the economy from the global financial crisis that pushed developed economies into recession.
