Global financial giant Morgan Stanley is bullish about the Philippines’ strong economic rebound next year against a backdrop of low inflation, the government’s infrastructure development push and the looming availability of vaccines against COVID-19.
In a report, Morgan Stanley hiked its 2021 gross domestic product (GDP) growth forecast for the Philippines to 13.5 percent from 13.1 percent previously—more bullish than the consensus average of 7.8 percent.
“The sharp rebound is coming: We expect the economy to recover to pre-COVID-19 levels by the first quarter of 2021, as the COVID-19 situation improves and vaccine availability nears. Moreover, policy stance should stay accommodative, as manageable inflation and the Fed’s [average inflation targeting] framework enable the [Bangko Sentral ng Pilipinas] to keep policy rate low and liquidity inflows help the Philippines to fund its fiscal deficit,” Morgan Stanley Research said in a Nov. 15 report titled “Goldilocks in the House.”
The investment bank said the country was also expected to ramp up its “Build, Build, Build” program to help spur recovery.
“Policymakers have pledged to prioritize and fast-track several big-ticket infrastructure projects with higher multiplier effect, given the unintended delays in construction activities in 2020 due to the COVID-19 lockdown and weather disruptions. With the 2021 budget being President Duterte’s penultimate budget before the next presidential election (May 2022), there is likely added impetus to accelerate infrastructure spending,” Morgan Stanley added.
Read more:https://business.inquirer.net/311903/ph-economy-in-for-a-big-comeback-in-2021-morgan-stanley-bets#:~:text=In%20a%20report%2C%20Morgan%20Stanley,consensus%20average%20of%207.8%20percent
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