First Metro Investment Corp. and the University of Asia and the Pacific through its publication Market Call reported the peso will remain weak this year.
The publication said while there may be periods of appreciation, the overall trend of depreciation will continue this year, although at a slower pace than 2016.
The Market Call said that the US economy will continue to improve slowly but surely as the research team has seen positive data consistently in the past quarter.
“(Philippine) exports should register more positive gains in 2017 and thus contribute a little to economic growth,” the report said.
OFW remittances (in USD) growth should remain subdued at the two percent to four percent range but peso-wise, the peso’s expected depreciation should help these remittances to provide additional stimulus to the economy,” it added.
Meanwhile, the publication said that latest economic data released by the government indicate that the Philippine economy is firmly on track along a seven percent or higher growth path.
“The 2.1 million new jobs in 2016 will likely support the trend of 1.1 million Filipinos annually moving out of poverty between 2012 to 2015 into 2016 and beyond,” the report said.
“This, together with higher peso value for OFW remittances, will ensure a solid base of seven percent and above growth in consumer spending, which accounts for more than 70 percent of GDP,” it added.
The report said investment spending should remain as the main growth driver, with continued double-digit growth expected in capital goods imports, similar to the construction sector.
“The latter will be buoyed up by aggressive infrastructure spending by the government and private residential and commercial construction that have shown a recent pick-up,” the study said.
“Foreign direct investments will resume to take a faster pace in 2017 as Philippine economic numbers continue to impress foreign investors, especially, the Japanese, Chinese, Koreans, and Taiwanese,” it added.
The Market Call said that these Asian investors will offset any slow down of US and Eurozone investments should they continue to focus on non-economic issues. (A. Celis, Malaya)