In the Philippines, the economic growth seems to slow down for this year and in 2017.
In the beginning of this week, the Philippine officials cut economic growth targets for 2016. On Wednesday, The International Monetary Fund lowered its economic growth expectation for the Philippines for this year and in 2017.
The new forecast from IMF indicates that the country faces increased risks, including weak economic growth in China, high volatility in Asian markets and capital outflows, and the unstable weather conditions, El Nino weather phenomenon.
The government cut its estimate for exports growth this year from 6% to 5% and lowered the forecast for imports growth from 12% to 10%. “Inflation will probably average near the low-end of the 2 percent to 4 percent target this year, before accelerating to the midpoint of the range in 2017” said the government.
The revised forecast was mainly based on exchange rate and crude oil prices. The assumption in exchange rate is from the range of 43~46 to 45~48 pesos per dollar. The estimate for Dubai crude oil of goes as low as $45 per barrel.
"Economic outlook is favorable but subject to increased downside risks." said Chikahisa Sumi, head of the IMF's mission to the Philippines. “The country's "growth is projected at 6% in 2016 and 6.2% in 2017," Mr. Sumi said in a statement after the mission concluded its visit in Manila.
There are still momentum injected into the market. Mr. Sumi said the Philippine economy would continue to get a boost from strong domestic demand, moderate inflation due to low oil prices and an improved employment situation.
The method Philippines responds to the risks is “Substantial given its ample reserves and policy space, both monetary and fiscal." Mr. Sumi said. To sustain investor’s confidence, a continuation of cautious macroeconomic policies and good governance would be crucial to the economy's growth.