MANILA, Philippines - The local economy may grow by 7.1% this year, beating official government estimate, on the back of higher consumption, investment spending and a strong service sector, a bank said.
In its latest Year-end 2010 Outlook and Forecasts, Metropolitan Bank and Trust Co. (Metrobank) said its projection is supported by the remarkable first-half gross domestic product (GDP) growth of 7.9%.
The government sees Philippine GDP growing by 5% to 6% in 2010, and accelerating to 7% to 8% in 2011.
"The services sector is seen to take the lead in the coming quarters, underpinned by the sustained increases in both consumption and investment spending," Metrobank said.
Metrobank also said the economy will benefit from upbeat investor sentiment and optimism over the Aquino administration.
It added consumer sentiment significantly improved in the third quarter due to better economic conditions and higher level of trust in government.
The Bangko Sentral ng Pilipinas earlier reported that the consumer confidence index increased from negative 28.7% in the second quarter to negative 14% in the third quarter, the highest reading since the central bank started the confidence survey in 2007.
"The upbeat sentiment of Filipino consumers reflected the positive outlook in other Asian countries amid the favorable forecasts on economic growth," Metrobank said.
Finance Undersecretary Gil Beltran on Tuesday said the economy may expand by more than 7% in the third quarter on higher exports and private sector investment.
Official GDP data will be released in November.