Thursday, 11 February 2010

HSBC sees 5.1% growth

Roderick T. dela Cruz
Manila Standard

Recovery in emerging markets is expected to push the country’s gross domestic product up by over 5 percent this year, an official of Hong Kong and Shanghai Banking Corp. Ltd. said Tuesday.

Junie Veloso, senior vice president and head of corporate banking division of HSBC in the Philippines, told reporters in a news briefing at Makati Shangri- La Hotel that the Philippines’ GDP could grow up to 5.1 percent in 2010, after posting a sluggish 0.9-percent expansion last year.

“So far, the Philippine economy has held up well. We expect that to even improve this year,” Veloso said during the launch of the HSBC Emerging Markets Index.

The Philippines was not among the 14 countries included in the index but Veloso said the surge of the measure in the fourth quarter was reflective of the performance of the Philippine economy.

“We are pretty well placed to capitalize on emerging markets’ growth,” he said.

Veloso noted that the GDP grew 1.8 percent in the fourth quarter and could have posted a faster growth if not for the recent typhoons that affected the agriculture sector.

After experiencing three quarters of contraction, the industry sector grew 1.1 percent in the fourth quarter. Exports also rose for the first time in 2009 at 5.1 percent in November.

Veloso said the bank saw a “strong upside for the first quarter,” citing the growth in remittances, recovery of exports and manufacturing, as well as increased consumer spending as interest rates remained low.

Remittances, he said, were expected to rise 5 percent to 10 percent this year from a year ago. Veloso said the Philippines was also expected to get a boost from the growth in other emerging markets, especially China, which is now driving global growth.

Veloso also cited the bright prospects for business process outsourcing sector and tourism industry this year.

The HSBC Emerging Markets index jumped to 56.1 in the fourth quarter of 2009, up from 55.3 in the third quarter and significantly higher than 43.8 a year ago. An index above 50 means positive growth in output of manufacturing and services.

The fourth-quarter index registered the fastest growth in the past two years, driven by exports and rising demand. The quarterly index is based on 19 manufacturing and service sector data among 14 emerging markets and provides an early and reliable indication of economic trend.

“Manufacturing has grown the fastest in terms of output and new orders,” Veloso said.

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