Philippine GDP growth likely to have accelerated in Q4 2019

Philippine fourth quarter GDP data is set to release tomorrow. According to a DBS Bank research report, the GDP growth is likely to have accelerated to 6.2 percent year-on-year from recent bottom of 5.5 percent year-on-year in as budge issue has been resolved and easing monetary stance has begun to impact cost of financing.

Consumption continued to be underpinned by benign inflation, rising 1.5 percent on average in the fourth quarter, and increased economic activity as government has started ramping up spending.

In spite of monetary easing, 75 basis points cut in 2019 and 400 basis points RRR cut for large and medium size banks, credit growth has remained below 8.8 percent year-on-year in the fourth quarter 2019, down from 10.3 percent year-on-year in the third quarter 2019.

“As private investment has not picked up significantly, government investment projects became the main growth driver besides consumption. Further, Philippines is likely to bank on the US-China phase 1 trade deal and recovery of global electronic demand”, added DBS Bank.