The Metropolitan Bank and Trust Co. (Metrobank) analysts project full-year growth measured as the gross domestic product, (GDP) this year averaging 6 percent and for the local currency the peso to weaken further toward the end the year to 43.60 per dollar.
Metrobank Research analyst Pauline May Ann Revillas said continued GDP expansion should average at least 6 percent as construction was seen posting faster growth in the second half and infrastructure spending has accelerated.
“Domestic economic growth will be supported by solid consumption spending, faster growth in construction spending, and double-digit growth in the manufacturing subsector,” Revillas said.
The sustained double-digit growth in the manufacturing subsector was expected in light of the strong domestic demand.
“Economic growth next year will be supported by higher government and investment spending amid the run-up to the 2016 elections. Risks to the domestic economy nonetheless remain amid the likely triple-dip recession in the euro area, slowing Chinese economy, looming domestic power crisis, and volatile financial markets,” Revillas said.
Metrobank research has revised its year-end US dollar-peso exchange rate to 43.60 from a previous forecast of 43 amid current market volatilities.
The sound macroeconomic fundamentals and solid international reserve position will continue to support the peso against the dollar.
“The interest rates in emerging economies remain relatively attractive, thus investors continue to chase the higher yields. Emerging-market currencies are seen to remain volatile. Nevertheless, jittery markets may likely calm down if the US [Federal Reserve] holds its current policy stance for a longer period of time,” Revillas added.