Philippines 2015 growth likely to be at 5.5%

Philippines GDP growth for the third quarter reported at 6% yoy, where in consensus expectations were around 6.3%. The Year-To-Date growth is at 5.6%.

After the release of GDP, the Economic Planning secretary Baliscan said that Philippines domestic growth was driving the Q3 activity and higher government spending was in line with th efforts put in by the government to address obstacles in spending in the slower external demand.

"Even though today's print was above our expectation, we remain comfortable with our 2015 growth forecast of 5.5%, with minor upside risks. We had recently downgraded our 2016 growth forecast to 5.5% from 6.0% earlier", estimates Barclays.

Baliscan highlighted that 2016's leadership change and weather conditions also adds to risks for growth. The key risks to growth continue to stem from weaker external demand and adverse weather conditions, though inflation has remained manageable. 

BSP appears comfortable with its policy stance, even with low inflation and slower-than-expected growth in first half of the year emphasizing that growth and upside inflation risks stem largely from poor weather and administered price hikes.

"BSP has remained on the sidelines throughout the year and is likely to remain so in 2016 as well.  We continue to expect the next policy move to be a hike, and only in Q2 2017", added Barclays.