Philippines says 2016 growth of 6.5-7 pct 'quite safe'

Neil Jerome Morales, Reuters

Posted at Dec 15 2016 06:37 PM

Laborers work at a construction site of a new expressway in Manila, Philippines November 17,2016. Czar Dancel, Reuters

MANILA - Economic growth in the Philippines should be in the upper part of the government's target range and might possibly top 7 percent, the economic planning agency said on Thursday.

Manila's target for this year is 6 percent to 7 percent.

Ernesto Pernia, economic planning secretary, told reporters "I would say quite safely (growth) would be between 6.5 percent to 7 percent", citing strong public and consumer spending as well as an expected pickup (in Q4) in exports and the farm sector.

Also on Thursday, the World Bank raised its 2016 growth projection for the Southeast Asian nation to 6.8 percent from 6.4 percent.

For next year, the World Bank expects the Philippine economy to grow 6.9 percent, higher than its previous estimate of 6.2 percent. Growth in 2018 is seen at 7 percent.

In July-September, the Philippine economy grew at its fastest annual pace in more than three years, 7.1 percent, thanks to higher government spending and firm domestic demand.

On Thursday, following the rate hike by the US Federal Reserve, President Rodrigo Duterte's office said Philippine economic managers "are confident that the domestic economy can withstand any external shocks as our economic fundamentals are strong."

The government is not worried about the weakening peso, currently trading at near eight-year lows, saying it could even provide a boost to the country's exports.

The peso has weakened about 5.7 percent against the dollar this year.

"An exchange rate of P50-P52 is still manageable," Pernia said.