MANILA, Philippines - Moody's Analytics has raised its economic growth forecast for the Philippines to 5.8 percent for 2014.
Moody's had earlier projected the Philippines' GDP to grow by 5.4%.
Despite the upgrade, the Moody's forecast is still lower than the Philippine government's 6.5 to 7.5% target for 2014.
Moody's Analytics senior economist Glenn Levine noted the Philippines' potential growth is 6.5%, but he does not expect public spending to continue growing at the same rate it did in 2013.
"The government was a big driver of the economy in 2013. I’m not sure that will continue at the same pace last year. Electoral cycle was important... Last year, (government spending) growth was astronomical... We would not expect that continue at that pace indefinitely," Levine said.
Last year, the Philippine economy grew by 7.2%, beating the government target of 6-7%.
Levine noted that Asia-Pacific economies were off to a slow start this year, due to weaker demand from the region and overseas. He cited monthly trade data from South Korea, Taiwan, and China, which indicated GDP growth for the first quarter would likely slow down from the fourth quarter of 2013.
"A harsh winter in the US explains some but not all of the weakness. China's slowdown, for example, has been driven more by domestic tightening through 2013... The latest round of government brake-tapping is working its way through China's economy. Exports, fixed asset investment, retail sales, and industrial production all slowed in the first two months of 2014," he said.
Moody's Analytics expects GDP growth in Asia to pick up in the third quarter of 2014.