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Powering ahead: Demand driving Philippines’ economy

First Metro Investment Corporation – UA&P Capital Markets’ latest research indicates the Philippine’s GDP looks set to forge ahead building on first quarter gains.

Income tax cuts, domestic demand and production should be driving faster growth with the nation’s gross domestic product (GDP) likely to expand at the end of Q2, comfortably beyond the 6.8% uptick of Q1, according to research by First Metro Investment Corporation and the University of Asia and the Pacific.

Bond market investors will be encouraged back into the market in response to the central bank’s raising policy rates on 10 May by 25 basis points (bps), although external factors such as US inflation and wage increases still need to be taken into account. Equities continued to trend downward in April with the PSEi reaching a one-year low of 7,557.91, as foreign investors continued to leave the market. First Metro predicts this shift is likely to be limited and short-lived, followed by a gradual recovery. 

According to Market Call, Capital Markets Research, private investment spending will continue to be robust despite April’s inflation reaching 4.5%. Despite the slowing of inflation, the report predicts it is likely to peak at the end of Q2, before easing towards 4% in the second half of the year.

To gain further insights from this report, courtesy of First Metro Investment, please click here


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