In the second half of 2019, the Philippines economy likely to improve. The improvement is possible since there is increasing government spending combined with the possibility of further central bank rate cuts. Therefore, it will tempt the investors to come in.
Moreover, the Philippines economy is now witnessing rising tourist numbers a bounce in overseas remittances, and inflation coming back under control. All of those support a positive outlook for the second half of 2019.
In July the country’s inflation fell to 2.7% year-over-year (YOY), according to First Metro Investment Corporation (First Metro). It is the country’s lowest number since September 2017.
It went downwards by a drop in rice and oil prices, together with a strengthening peso. The mid-year inflation figure is not only lower than anticipated but also well within the central bank’s target of 2-4% (2018-20).
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The nation’s GDP hitting a four-year low of 5.6% in the first quarter of this year. But, First Metro predicts the economy will see the growth of between 6-6.5% by year-end. It will be driven domestically by solid consumer, government and investment spending.
Growth Drivers
The country has invited new interest from international tourists. The number of international tourists which see the nation as interesting holiday destination is significantly increasing. Tourist numbers increased by 8.5%, to 2.87 million, in the first four months of 2019.
In other words, there will be around 8.2 million tourists will visit the Philippines by year’s end.
Besides, personal around 8.2 million tourists will visit the Philippines by year’s end.
Market Moves
The markets are likely to remain conducive to bond investment in the second half of the year. The Bangko Sentral ng Pilipinas [BSP] rate cuts and the central bank’s June announcement of a uniform 4% reserve ratio requirement (RRR) for long-term negotiable certificates of time deposits, issued by banks and financial institutions.
This move by the BSP was designed to injected greater liquidity and deepen financial markets.
