New Market Research Report: Philippines Country Risk Report Q2 2015

Core Views

• While the Philippine economy performed poorly in Q314, owing to lacklustre fiscal spending and the surge in import growth, we nevertheless remain positive on the economy. Strong domestic demand should continue to provide support. That said, potential growth headwinds ahead will pose downside risk to our 2015 real GDP growth forecast of 6.0%.

•Falling oil prices and the deceleration in money supply growth should keep inflation manageable over the coming months. That said, we continue to see one 25 basis points rate hike in H215, owing to potential price pressures emanating from still strong credit growth.

•Continued budget discipline by the Philippine government will keep the country's fiscal position on a sustainable trajectory over the coming years. We forecast the country's fiscal deficit to narrow from an estimated 0.8% of GDP in 2014 to 0.6% in 2015. However, the continued lack of fiscal spending momentum could weigh on real GDP growth in 2015.

Full Report Details at
- http://www.fastmr.com/prod/951907_philippines_country_risk_report_q2_2015.aspx?afid=301

•While a still positive economic growth outlook will keep the Philippine peso resilient, we believe ongoing weakness in regional peer currencies will limit strength in the unit. We maintain our neutral outlook for the peso, and see the unit averaging PHP44.60/USD in 2015.

Major Forecast Changes

•We have revised our 2015 benchmark interest rate forecast to 4.25%, from our previous estimate of 4.00%.

•We have revised down our 2015 average inflation forecast to 2.9%, from 3.8% previously.

•We have revised our forecast for the Philippine peso to average PHP44.60/USD in 2015, from our earlier estimate of PHP43.71/USD.

Key Risks To Outlook

•The Philippines remains at risk of substantial hot money outflows in the event of acute global credit or financial market stresses.

•Growth slowdowns in both China and Japan, to which the Philippines is heavily exposed in both investment and trade terms, could undermine the country's strong domestic growth story should they be more severe than expected.

•The...

The Philippines Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Philippines and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Philippines' economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Philippines' economic and industry growth through end-2017.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.

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