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PHL growth in top tier of Asia-Pacific -- Morgan Stanley Date: August 01, 2017
THE PHILIPPINES is “in sync” with its regional peers in its economic growth story, but better-positioned than some, amid the broadening of the recovery in the Asia-Pacific led by external demand, local consumption, and investment, economists at Morgan Stanley Research said.

Morgan Stanley rated the Philippines’ overall growth trend at “slightly up,” following a “slightly up” rating on consumption and investment, and an “up” rating on government spending and a “neutral” assessment for external demand.

The slightly up reading for overall growth matches that of Australia, India and Singapore, while China, Hong Kong, South Korea, Malaysia, and Thailand were rated “neutral.” Receiving a “down” rating were Indonesia and Taiwan.

According to the research note, the Philippine economy is seeing a “recovery in domestic demand alongside supportive external demand.”

In Morgan Stanley’s view, export growth eased to a 13.7% year on year in May from the 19.1% uptick in May, but “remains robust relative to historical trend,” despite the slowdown.

The latest government estimates by the Philippine Statistics Authority have exports growing 12.1% in April.

“Domestic demand indicators have firmed in recent months... while passenger car sales registered positive growth for the second month,” Morgan Stanley said.

The Philippines saw a 5.8% uptick in May industrial production, greater than April’s 4.3%. Car sales meanwhile grew 14.4% in June, nearly doubling May’s 7.3% growth, according to Morgan Stanley.

Morgan Stanley said the government’s fiscal deficit widened to 2.3% of gross domestic product in May, while the current account deficit narrowed to 0.4% of gross domestic product in March.

The analysts expect monetary policy to be kept unchanged this year.

“For the other central banks, however, we expect rates to be either kept on hold or hiked (in Philippines, Indonesia and Taiwan) from later this year/early next year.” -- Elijah Joseph C. Tubayan


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