MANILA, Philippines – The Philippine economy is expected to have grown 6.8 percent in the second quarter, faster than the six percent expansion in the same period last year.
“We expect growth to remain supported by consumption and investment,” UK-based Barclays said in its Global Economics Weekly report published Friday.
The bank’s forecast is within the government’s target of a six to seven percent economic growth this year but is slower than the higher-than-expected 7.8 percent expansion in the first quarter.
Second quarter gross domestic product (GDP) data is set to be released by the National Statistical Coordination Board next week.
Amid strong economic growth and a manageable inflation, Barclays noted the Bangko Sentral ng Pilipinas may keep policy rates steady in the coming 12 months.
“With a favorable growth-inflation balance, we expect the central bank to keep rates unchanged in the coming 12 months,” Barclays said.
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The central bank has kept overnight borrowing and lending rates at 3.5 percent and 5.5 percent, respectively, since the start of the year. Rates were kept steady amid a benign inflation environment and a robust Philippine economy.
Likewise, Bank of America Merrill Lynch (BofA), in its Asia Economic Weekly report said it expects the Monetary Board to keep rates unchanged at its next policy meeting on Sept. 12.
“We do not think that monetary authorities will consider a policy rate reduction at this stage,” BofA said.
The bank also noted it has raised its 2013 growth forecast for the Philippine economy to 6.6 percent from an earlier six percent “mainly on the back of the strong first quarter and the expectations that fiscal stimulus and investment spending would remain buoyant.”
BofA has also hiked its 2014 growth estimate for the Philippine economy to 6.1 percent from an initial six percent.