MANILA, Philippines - Philippine economic growth likely slowed in the first quarter, according to a report by HSBC.
In its Asia Economics Quarterly 2Q 2014, HSBC expects Philippine gross domestic product (GDP) growth to slow in the first three months of 2014 due to super typhoon Yolanda's impact and net outflows.
"Growth is expected to slow in Q1 2014 on weaker agriculture output due to the impact of Typhoon Haiyan. Slower net capital inflows are also a concern. In January 2014, the country recorded the sharpest portfolio investment outflow of $3.1 billion since 1999, with overall net outflows of $1.8 billion. While capital outflows can be somewhat disruptive, they will not cause systemic risks, as the current
account surplus can offset some capital outflow," the report said.
It did not say how much the economy would slow but it will be coming from 6.5% growth in the fourth quarter.
HSBC maintained its GDP growth forecast for the Philippines at 5.9% for 2014, lower than government target of 6.5 to 7.5% target. The Philippine economy grew 7.2% in 2013.
Meanwhile, HSBC says Asia needs what it describes as an "overhaul", with exports rising less than usual, consumers capping spending and investment growth slowing.
"What’s needed is a heavy dose of reforms to accelerate productivity and fuel animal spirits. In this, China is not alone: Japan requires serious retooling, India’s new government will face some tough decisions, and officials across ASEAN urgently need to hammer out a fresh growth strategy. Fortunately, there is still some gas in the tank: with interest rates low across the world, and inflation well under control, an outright stall seems unlikely. But that shouldn’t dissuade Asian officials from a comprehensive tune-up," the report said.
HSBC expects Bangladesh, Hong Kong, Malaysia and Thailand to grow faster than economists expect, while cutting forecasts for Thailand, Japan and Singapore. - With report from ANC