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Sunday, June 25, 2017
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MANILA – Credit Suisse has turned less bullish about the Philippine economy and lowered its growth forecast for the country citing a “weak” labor market.
Michael Wan, economist at Credit Suisse said they now expect the country to grow 6.0 percent in 2017 instead of 6.4 percent.
He explained that private consumption, one of the economy’s major growth drivers, is expected to soften further due to an unusually weak labor market.
Wan attributed the weakness to uncertainties in government’s policy on contractualization and weak government spending.
The Philippine economy grew only 6.4 percent in the first quarter, missing expectations of a 7.0 percent expansion, due to slower public spending.
Despite the government’s vow to ramp up infrastructure spending and raise the budget deficit to boost the economy, disbursements grew at a much slower pace and failed to hit targets in the first quarter.
Wan also cited the shift to a K-to-12 education system, which has displaced thousands of teachers in the academe.
Earlier this month, Fitch Ratings also said it might downgrade its growth outlook for the Philippines this year following the weaker than expected expansion in the 1st quarter.
The Duterte administration meanwhile remains confident the economy can achieve its 6.5 to 7.5 percent growth target this year. (ABS-CBN News)
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