MANILA – Switzerland-based UBS revised upwards its growth projection for the Philippine economy this year to 6.3 percent from 5.8 percent previously on account of the government’s upward revision on the second quarter growth.

“This is noteworthy, the Philippine real GDP growth has only surpassed six percent five times since 1980, in 1988, 2004, 2007 and 2010,” UBS said in its Asian Economic Report where it dubbed Philippines by the Numbers dated yesterday.

UBS eyes a 4.5 percent growth for the country in 2013 and 4.9 percent in 2014.

The domestic economy grew by 7.1 percent in the third quarter, the highest in ASEAN and second in Asia after China’s 7.4 percent growth.

Although growth in the first half this year was upwardly revised to six percent, the higher end of the government’s five to six percent growth 2012 target, the UBS report projects domestic growth to register a slower growth in the second half due to weak exports “before recovering modestly in 2013.”

“Moreover, although we expect an improvement in trade growth during 2013, lead indicators of trade activity and domestic activity suggest the tail end of the year may be a little below par,” it said.

UBS also expects private consumption expenditure to remain strong going to 2013 due in part to moderate inflation but said that risks remain because of negative developments overseas that will impact on Filipino workers overseas and their remittances as well as higher global food prices that can impact on local prices.

Meanwhile, exports are expected t recover in 2013 while imports is projected to grow stronger “due to favorable domestic demand conditions.”

UBS projects inflation to average at 3.2 percent this year and increase to 4.1 percent next year given the higher food prices on account of among others weather-related factors and higher global commodity prices.

As of November, rate of price increase slowed to 2.8 percent from month-ago’s 3.1 percent bringing the average in the first 11 months this year to 3.2 percent.

The government’ inflation target for this year until 2014 is three to five percent.*PNA

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