Moody’s lowers 2015 PH growth forecast

MANILA - Debt-watcher Moody’s Investors Services has lowered its 2015 growth forecast for the Philippines amid government’s difficulty in increasing its spending.
Moody’s now expects the country’s economy to grow by 6 percent this year, slower than its earlier estimate of 6.5 percent.
Moody’s senior analyst Christian de Guzman said they adjusted the forecast after the economy slowed to its lowest expansion in three years in the first quarter.
De Guzman added that weak global trade, which helped pull down first quarter growth alongside low government spending, may continue to be a drag.
Moody’s expects the Philippines can continue to grow faster than most of its peers in Southeast Asia, boosted by the ongoing recovery in the US and low commodity prices, including oil.
“The ongoing recovery in the US, the largest source of remittances, is also supportive of household consumption. Lower global commodity prices are likely to boost growth through disinflation,” Moody’s said.
The rating agency however said it will be difficult for government to hit its full-year target range of 7 to 8 percent without more effective budget execution.
“The government’s ambitious growth target may be difficult to achieve in the absence of more effective budget execution,” Moody’s said.
In the first quarter of the year, the country’s gross domestic product growth slowed down to 5.2 percent, the slowest since 2012 due to sluggish government spending.
Moody’s also said the Philippines is unlikely to get another credit rating upgrade anytime soon.
The ratings company kept its outlook on the country at stable, saying there aren’t enough risks to bring it lower, and there isn’t enough to convince them to push it higher. -- (With ANC;

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