Driving the country’s economy this year would be the government spending on infrastructure, according to Standard Chartered Bank.
The bank, however, reduced its growth forecast for the Philippine economy from 6.4 percent to 4.6 percent.
Standard Chartered Bank economist for Asia Chidu Narayanan said growth may even be around the 3 percent level if the government’s infrastructure investment will not pick up by around August since private sector investment is projected to remain soft.
“This puts the onus on the government,” he said.
On inflation, Narayanan said this may have peaked already and is “not so much of a risk anymore” even as it remains above the government’s 2-4 percent target band.
He forecasts inflation to average at 3.9 percent this year, within the government’s target band.
Domestic rate of price increases surpassed the government’s target last January when it rose to 4.2 percent, and further accelerated to 4.7 percent the following month.
It decelerated to 4.5 percent in the next three months and slowed further to 4.1 percent last June.