IMF raises Philippines growth forecast

The IMF has given a strong growth forecast to the Philippines economy saying that the country could lead the five largest economies in ASEAN after being one of the lowest performers in recent years.

Article IV Consultation involves a yearly evaluation of member countries’ latest economic and financial developments. The last time an IMF team visited the country for such a review was in March last year, involving consultations between officials of the multilateral lender and the Philippine government that ended in July.

In its latest World Economic Outlook report that was released in January, the IMF said the Philippines could again lead the five largest economies in the Association of Southeast Asian Nations (ASEAN) in terms of growth rate at 6.6% this year. That forecast outpaces the 5.2% average the IMF estimates for ASEAN-5 consisting of Malaysia, Indonesia, Singapore, the Philippines, and Thailand.

Last year, Philippine gross domestic product (GDP) growth came in at 6.1%, a few points shy of the government’s 6.5-7.5% target after a five-quarter-high of 6.9% was seen in October-December.

Crawling farm sector output and lower-than-programmed — and at times even contracting — state spending had weighed on growth for much of last year.

Still, the expansion bested the 6% notched by Malaysia in 2014, Indonesia’s 5%, Singapore’s 2.9%, and Thailand’s 0.7%.

This year, the government expects Philippine economic growth to accelerate to 7-8%.

“An IMF team will be visiting from March 26 to 30 on a pre-Article IV consultation to discuss the outlook and issues that could be covered in the Article IV consultation mission probably in May 2015,” IMF Resident Representative Shanaka Jayanath Peiris said.

Mr. Peiris had said in January that “lower global oil prices and anticipated pick up in government spending from the low base of 2014” could drive this year’s growth.