Wednesday, 25 November 2009

Remittances, spending in polls expected to drive 2010 growth

L. D. Desiderio

ROBUST REMITTANCES from Filipinos overseas and the impact of spending for national elections will drive growth to accelerate in 2010, HSBC said yesterday.

In a briefing yesterday, HSBC Philippines Treasurer and Head of Global Markets Jose Arnulfo "Wick" A. Veloso told reporters that Philippine gross domestic product (GDP) is expected to expand by 4.2% next year, compared to the government’s own projection of 2.6%-3.6%.

For this year, the government sees GDP growth falling within the 0.8%-1.8% range.

"Next year, we have to consider the elections. A lot of employment is expected to be generated with each candidate who is serious about running to be spending around P5 billion for the campaign," he said.

He added that this factor adds to the fact that remittances from overseas Filipino workers, which have constantly defied expectations they would be weighed by the economic crunch, will remain robust as the global economy starts recovering next year.

GDP growth for the April-June period was 2.4%, against 1.5% the previous quarter.

Inflation, he said, could reach 3.2% this year and 4.8% next year, within the government’s targeted 2.5%-4.5% this year and 3.5%-5.5% next year.

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