Moody’s upgrades Philippine economy growth forecasts

Credit rater cites tax reform, infra dev’t plans

MANILA, Philippines – Moody’s Investors Service upgraded the country’s economic growth forecasts for the next two years as it believes the successful implementation of the tax reform and infrastructure development plans by the Duterte administration could boost the credit rating of the Philippines.

In its latest overview and outlook on the Philippines, Moody’s said it expects the country’s gross domestic product (GDP) to grow 6.5 percent this year and next year.

This was higher than the previous GDP growth forecast of 6.2 percent last July.

“We expect the largely domestic drivers of growth to remain intact over the next year. Overall, we expect real GDP growth to remain at around 6.5 percent in 2016 and 2017,” Moody’s said.

The economy grew seven percent in the second quarter from 6.8 percent in the first amid the strong boost from election related spending.

This brought the average GDP growth in the first half to 6.9 percent from 5.5 percent in the same period last year. This is within the higher end of the six to seven percent growth penned by economic managers.

Moody’s said the concrete plans of government to reform the tax system and accelerate infrastructure investments as being anchored on a “well defined development agenda.”

“In particular, an acceleration of infrastructure development and the passage of comprehensive tax reform would be credit positive,” it said.