DBS: PH to grow 6.4% next year
Development Bank of Singapore projects a 6.4% growth in the Philippine economy next year.
Inflation is set to ease from this year’s high, and DBS expects the country’s gross domestic product or GDP to get back on track by 2019. This is slightly higher than this year’s forecast which was at 6.3 percent, which was also significantly lower than the government’s expected 7.0-8.0 percent target.
According to DBS, “Given the resilience and the prospect of inflation easing in the next two years, we believe consumption could grow even stronger.” In fact, despite high consumer prices, consumption in the Philippines has remained vigorous, DBS citing the Train law or the Tax Reform for Acceleration and Inclusion law as one of the reasons for that.
Tax reforms like TRABAHO or Tax Reform for Attracting better and Higher Quality Opportunities Act calls for the gradual lowering of corporate income taxes but also includes the modernization of monetary incentives.
DBS maintains that the economy should not remain complacent now. In fact, in order to achieve higher potential growth, the government should continue to exercise their current reforms to address supply barriers.