Fitch Ratings trims PH growth forecast
Credit to Author: The Manila Times| Date: Wed, 24 Apr 2019 08:41:51 +0000
DEBT watcher Fitch Ratings cut its gross domestic product (GDP) growth forecast for the Philippines this year, tagging the delayed national budget and external factors as reasons for the downward adjustment.
“Fitch has revised down its GDP growth forecast for 2019 to 6.2 percent from 6.6 percent previously, as it expects the recent budget delay and external factors to weigh on growth,” Fitch said in its latest APAC Sovereign Credit Overview 2019 released on Wednesday.
Its forecast matched the GDP growth in 2018 but fell at the lower end of the government’s revised 6.0-7.0 percent target for 2019.
The credit ratings agency said that it “anticipates the budget delay to undermine public capex spending, which has been a key growth driver under the current government.”
The 2019 national government budget was only signed last week by President Rodrigo Duterte following months of delay.
Prior to this, the government had been operating on last year’s P3.767-trillion budget since the start of 2019. This means agencies only spent for items detailed in the 2018 outlay and cannot embark on programs and projects supposed to be implemented at the start of 2019.
“In addition, we expect exports to be affected by the ongoing trade tensions between the US and China, and the slowdown in China,” Fitch said.
Latest available data showed that exports contracted 0.9 percent to $5.18 billion in February, resulting in a year-to-date tally of $10.46 billion—a 3.9 percent drop from a year earlier. MAYVELIN U. CARABALLO
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