PH economy to improve in 2019, but elections pose risk – analyst

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A pedestrian walks pasts a wall plastered with election posters in Metro Manila. GETTY IMAGES

MANILA – The Philippines’ economic fundamentals will improve this year, against the backdrop of uncertainty due to the mid-term elections, an analyst said.

The peso will stabilize against the dollar and there will be “some slowdown” in inflation even as the headline growth rate will slow compared to 2018, said Anwita Basu, a senior economist at The Economist Intelligence Unit.

Domestic demand will remain strong and the government is expected to maintain fast disbursements to buoy the economy, she told ANC.

“Some reforms that the government has already pushed through will improve the fiscal situation, but its’ a combination story of rising political risk,” she said.

Investors will monitor how the results of the midterm vote will affect President Rodrigo Duterte’s leadership in his last 3 years in office, Basu said.

The Bangko Sentral ng Pilipinas could raise interest rates by 50 to 75 basis points more this year, after a cumulative 1.75-point increase in 2018. It kept the benchmark steady during its last policy meeting.

In the US, the Federal Reserve will likely slow its interest rate hiking pace, which will bring relief to emerging markets, she said. (ABS-CBN News)

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