BPI expects PH economy growing by at least 6.5% in 2019



BPI or Bank of the Philippine Islands, is a 167 year-old-bank as well as the first bank in the Philippines as well as South East Asia has recently published a research through BPI Global Markets, that the country (PH) is expected to grow and accelerate by at least 6.5% in 2019. This is on the back of capital goods expenditure and a recovery in household spending.

The Philippine economy has seen sluggish growth in 2018 after a slew of local and global events, especially the surge in global oil prices, which led to rising inflation and an increase in interest rates.

According to BPI Lead Economist Jun Neri, who was recently ranked by the Department of Finance as one of the most accurate market economists forecasting PHL GDP growth from 2016 to 2018, the projected 6.5% GDP growth in 2019 may even be exceeded. “Should oil prices stabilize this year, growth may accelerate further as household spending is expected to recover from the 2018 slowdown, and as overall spending activity picks up ahead of the May 2019 mid-term elections,” Neri said.

On the other hand, inflation is expected to return to the 2.0% - 4.0% target in 2019 on the back of moderating global oil prices. With inflation in a downtrend, the economy has the opportunity to return to the sweet spot of low-inflation and high growth just as election spending boosts overall demand.

With the expected increase in consumption as a result of the 2019 elections, GDP may exceed the growth in the previous two years,” he noted.

The report also cites that a manageable widening of the trade deficit is expected to translate to a modest depreciation of the Philippine peso, with additional pressure from global trade disputes and financial market volatility in major markets. Thus, while the US Dollar – Philippine Peso market is closer to the PhP52.00 level in end-2018, BPI anticipates a return to the PhP54.00 range as early as the second quarter of this year.

This will be the result of external financial and economic factors along with sustained domestic private and public sector demand for the dollar in 2019 as capital outlays catch up with ASEAN norms.

BPI believes 2019 could spell a more positive story for the nation’s production side, too. Services growth are expected to remain strong, led by the financial and trade sectors.

Manufacturing activity may also improve with stabilizing energy prices, just as newly constructed and rehabilitated irrigation infrastructure could boost agricultural output after a poor showing in 2018. Lastly, construction may benefit from the government’s ‘Build, Build, Build’ program, especially if the groundbreaking of big-ticket projects such as the subway and airport rehabilitation finally kick in this year,” said Neri.

About Emilio 'Jun' Neri:

Mr. Neri’s research team in Bank of the Philippine Islands (BPI) manages to consistently rank in Bloomberg’s survey of analysts in their monthly and quarterly economic indicator and financial market polls. His team has been consistently ranked #1 in Bloomberg’s PHL GDP forecasting poll since January 2016, topping analysts even from foreign financial institutions. Jun was also voted in polls conducted by The Asset magazine as #3 best Fixed Income economist in the PHL from 2013 to 2016, the only one voted from a domestic bank. He was also voted #3 Best Fixed Income and Best Equities Economist by the Fund Managers Association of the Philippines (FMAP) in 2013, 2015 and 2016, also the only one from a domestic financial institution. In 2017 and 2018, he was named #2 Best Equities Economist. 

Mr. Neri is also currently a member and treasurer of Board of Trustees of the Philippine Economic Society (PES).

Prior to his appointment as lead economist of BPI, Mr. Neri served as economics and banking sector analyst for a former Bangko Sentral ng Pilipinas‐Monetary Board Member. He was also a consultant at the Asian Development Bank (ADB), providing technical support and assistance in capacity building efforts for the Department of Finance (DoF), from 2002 to 2006. Mr. Neri also worked in the academe, as senior economist at the School of Economics (SEC) of the University of Asia and the Pacific specializing in open‐economy monetary and fiscal policy analysis.


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BPI expects PH economy growing by at least 6.5% in 2019 BPI expects PH economy growing by at least 6.5% in 2019 Reviewed by Vernon Joseph Go on Thursday, February 28, 2019 Rating: 5

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