Manila (Philippine Daily Inquirer/ANN) - The research arm of Moody's Investors Services has raised its economic growth forecast for the Philippines this year to 4.7 per cent from 4 per cent, citing the government's ant-corruption drive and big push for infrastructure development that will aid efforts to attract investors.
The revision of the forecast came after the Philippines posted a 6.4-per cent growth in its gross domestic product in the first quarter, beating most expectations. It was the second-fastest growth rate for the period in Asia after China's 8.1 per cent.
"The Philippines kicked off 2012 at a blistering pace. This prompted an upward revision to the growth forecast," Moody's Analytics, the economic research unit of credit watcher Moody's, said in its latest paper on the country.
It said the current administration's focus on good governance was tickling the interest of investors on the Philippines, which used to be out of the radar screen of most foreign firms.
The research firm also expressed confidence that the promotion of public infrastructure among potential investors from the private sector would significantly boost investments in the remainder of the year. The Aquino administration has promised to speed up the implementation of its Public-Private Partnership (PPP) programme this year.
"The investment environment in the Philippines has improved over the past year as President Benigno Aquino's plans have begun to take effect, with a focus on infrastructure development, stamping out corruption, and the seemingly obligatory chastisement of his predecessor, Gloria Arroyo, who now sits in jail on charges of electoral sabotage," Moody Analytics said.
It credited the business confidence resulting from good governance for the recent favourable performance of the Philippines' stock market. It said that the Philippine Stock Exchange index (PSEi) was so far up 12 per cent this year and this growth was faster than most Asian stock market indices.
"These twin policy arms, lifting infrastructure and reducing corruption, should also help to shore up both domestic and foreign direct investment, lifting the economy's long-term growth prospects," it said.
The 4.7-per cent growth projection of Moody's Analytics, however, was below the government's official target of 5 to 6 per cent. It said the gap between its projection and the government's was the view on exports and remittances.