(The Philippine Star) | Updated February 6, 2017 - 12:00am
MANILA, Philippines -
Barcelona-based think tank FocusEconomics said private consumption would
continue to be the main driver of economic expansion in the Philippines over
the next two years.
Massimo Bassetti,
economist at FocusEconomics, said private consumption would expand six percent
this year and 5.9 percent in 2018.
Bassetti said
remittances, which accounted for approximately 9.8 percent of gross domestic
product (GDP) in 2015, are an important source of income for many Filipino
families and thus one of the main drivers of private consumption.
Bassetti said cash
remittances from overseas Filipino workers surged 18.5 percent to $2.2 billion
in November, the highest growth in over eight years.
Latest data from the
Bangko Sentral ng Pilipinas (BSP) showed remittances rose 5.2 percent to $24.34
billion in the first 11 months of 2016 from $23.14 billion in the same period
in 2015.
The central bank said
the improving global economic conditions, particularly in the US, may have
contributed to the overall growth in remittances.
By country source, the bulk
of cash remittances came from the US, Saudi Arabia, United Arab Emirates,
Singapore, the United Kingdom, Japan, Qatar, Kuwait, Hong Kong, and Germany.
Combined remittances
from these countries accounted for more than 80 percent of the total cash remittances
in the first 11 months of 2016.
The economy grew 6.6
percent in the fourth quarter of last year.
“The robust growth in
the final quarter reflects the strong fundamentals that underpin the current
growth phase and bodes well for the Philippines’ outlook,” he said.
The think tank said
growth in the Philippines continues to be underpinned by robust domestic
demand, which is largely offsetting the external sector’s negative contribution
to growth.
It pointed out the
ongoing expansion in public spending has been reflected in both an acceleration
in public construction activity and a pick-up in government consumption.
Rising consumer
confidence, falling unemployment and growing overseas remittances translated
into solid, if moderating, consumer spending.
The economy expanded
6.8 percent in 2016 from 5.9 percent in 2015, well within the six to seven
percent target penned by economic managers.
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