By Alito L. Malinao
MANILA, Oct. 6 (Xinhua)-- After one regional banking institution and two international rating agencies raised their full-year growth forecast for the Philippines, the government of President Benigno Aquino is now on its way to achieve the high-end target of 6 percent growth in the country's gross domestic product (GDP) this year.
In its updated Asian Development Outlook 2012 released last Wednesday, the Manila-based Asian Development Bank (ADB) has said that the Philippines could grow by as much as 5.5 percent this year, higher than its earlier forecast of 4.8 percent.
Last year, the country's economy grew by a dismal 3.9 percent after a big slump in exports, particularly in electronics and the weak government spending in infrastructure.
According to the ADB, it raised its forecast for the Philippines after the local economy grew by a better than expected 6.1 percent in the first half of the year.
Interestingly, the ADB has cited the Philippines as among the few countries in Asia whose forecast the bank did not scale down.
The ADB said that growth in the region is now seen at 6.1 percent this year instead of the 6.9 percent, which was the bank's original projections for Asia released last April.
The lender bank slashed its earlier forecasts for Asia this year due to the continuing economic problems in Europe and the United States.
The ADB said that Asia, excluding Japan, will expand by 6.1 percent this year, down from a July estimate of 6.6 percent.
India's growth is expected to slow to 5.6 percent this year before bouncing back to 6.7 percent in 2013.
ADB had previously forecast growth rates of at least 7 percent for India in 2012 and 2013, but said it had to revise them down due to problems in the agricultural and industrial sectors, as well as weak demand from overseas.
The ADB also said that China's growth rate will fall back from the "robust" 9.3 percent seen in 2011, dropping to 7.7 percent this year and 8.1 percent in 2013 but still considered " extraordinary growth rates" by international standards.
Earlier, international credit watcher Standard & Poor's (S&P) also raised its growth forecast for the Philippines for 2012, saying the country has the capability to withstand unfavorable developments in the global economy.
In its latest report titled "Asia Pacific Feels the Pressure of Ongoing Global Economic Uncertainty," S&P said it now expects the Philippine economy to expand by 4.9 percent this year, instead of the earlier projection of 4.3 percent.
Like the ADB, the credit-rating firm also lowered its growth projections for several economies in the region as it took into account the impact of the prolonged debt crisis in the euro zone, the still lackluster growth of the United States and a slowdown in economic giants China and India.
S&P said the unfavorable developments in the world's biggest economies were expected to dampen growth of many Asia-Pacific countries, except for the Philippines.
The growth forecasts have been reduced by one percentage point for Hong Kong and India, which S&P now sees growing by just 1.8 percent and 5.5 percent, respectively.
The projections have been cut by about half a percentage point for China to 7.5 percent; Japan, 2 percent; South Korea, 2.5 percent; Singapore, 2.1 percent; and Taiwan, 1.9 percent. For Australia, the growth forecast was cut to 3 percent from 3.2 percent. "The forecasts for other Asian economies remain unchanged except for the Philippines, which went to 4.9 percent from 4.3 percent, reflecting the ongoing strength of that domestic economy,"S&P said in the report.
The outlook of S&P for the Philippines, however, was still below the government's official target of between 5 and 6 percent.
Philippine government officials have credited the boost in public spending, strong household consumption (supported by remittances) and a highly liquid banking sector for the domestic economy's growth performance. "S&P's upward revision of the GDP growth forecast for the Philippines validates our view that home-grown sources of resilience can buffer the economy from the external headwind," governor Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas, the country's central bank, told the media.
The Singapore-based DBS Ltd. has also upgraded its 2012 growth forecast for the Philippines.
In its recent research issuance, the DBS said it now expects the Philippine economy to grow by 5.6 percent this year from a previous outlook of 5.3 percent "on account of strong first half performance.