While prospects for the Philippine economy remain positive even after gross domestic product (GDP) lost steam in the first quarter to a lower-than-expected 5.7 percent rate of expansion, compared with 7.7 percent a year earlier, the remainder of 2014 may yet present new bumps ahead, it said over the weekend.
"We may still be able to achieve the government's [6.5 percent to 7.5 percent] target, although growth could settle at a more moderate pace [partly due to waning base effects]," Bangko Sentral ng Pilipinas (BSP) Governor
However, the BSP Governor added a note of caution, saying that the outlook for the domestic economy is not without risks.
"Global financial conditions could tighten as the US Federal Reserve continues to taper its quantitative easing program. Slower growth in
The Fed continued to cut its monthly purchases of US Treasuries and mortgage-backed securities by a further
Meanwhile, the Chinese economy--which ranked third in terms of the top destination of Philippine exports in March--is seen moving marginally lower over the next two years.
Tetangco tempered his warning with a forecast that favorable business and consumer confidence readings, robust credit growth, stronger export demand due to a pickup in global growth, and fiscal stimulus from reconstruction and rehabilitation spending will continue to underpin domestic activity this year.
The BSP's recent
A separate reading of the
Credit growth, as reflected by bank lending, sustained its fast pace in April as loans for productive sectors of the economy rose further.
Philippine merchandise exports kept their doubledigit growth rate in March for a second month as earnings jumped 11.2 percent to
Tetangco also pointed to sustained growth in investment, which he said indicates domestic demand remains firm enough to help the economy regain some momentum in the months ahead.
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