MANILA, Philippines - The AIA Group, the parent firm of Philam Life, has remained positive towards the Philippine economy as it forecasts growth to maintain its strong momentum at 6.9 percent this year.
The country’s gross domestic product (GDP) grew at a robust rate of 7.2 percent last year.
Dr. Brian Murray, the AIA Group’s head of economic research, said growth, however, will slow down this year coming from a high base and factoring in the damage caused by super Typhoon Yolanda in the latter part of 2013.
“Growth remains balanced between consumption and investments, and not leveraged,” Murray said during an economic briefing sponsored by the Philam Asset Management Inc. (PAMI).
The AIA economist said the country’s foreign debt remains under $60 billion, while foreign currency reserves stood above $80 billion. “That means a healthy current account surplus of roughly $10 billion or 7.4 percent of GDP.”
Likewise, remittances have been growing by an average of over five percent annually, nearing $25 billion last year.
However, Murray warned that too much reliance on remittances from overseas Filipinos could be counter-productive to the economy.
Murray said the remittances are coming from diversified sources, in terms of country locations, profession, distribution channels, among others.
“While that set-up has cushioned the economy during the various financial crisis, it is also the reason why its growth path will be not as dramatic as revenues from business process outsourcing (BPO) which is forecast to surpass remittances in the next few years,” the AIA economist said.
He further encouraged the Philippines to develop other revenue and growth sources including industry, manufacturing and the services sector.