According to the Bank of the Philippine Islands (BPI), the countrys economy grew by 5.5% in Q4 2011 which brought the total year expansion to 4.1%.
Forecasting the countrys gross domestic product (GDP), the company expects expansion to rise to 5% in 2012, due to increasing government spending.
"The Philippines is at a critical juncture at this point in time, as the New Year represents a fresh start for the Aquino administration, which arguably belly-flopped in 2011. The favourable December inflation was an unexpected grace, underscoring the countrys economic managers chances to flex their monetary and fiscal muscles moving forward, especially after missing rare windows of opportunity last year," the BPI research said.
Research released mid-January written by BPIs market research department states that the bank will cut its key interest rates by 50 basis points at the most for the full year, which suggests yet another quarter-percentage reduction.
Despite the countrys fiscal contraction in 2011, the research suggests that the administration had kick started infrastructure development in Q4, making the budget deficit to hit 1.9% GDP from 0.8% - which was consecutive for 9 months.
For the first three quarters of 2011, the Philippines economy grew by 3.6%, way below the 8.2% recorded for the same period in 2010.
The Presidential election year was cited as the key factor behind the difference, with the research stating that the GDP will continue to grow despite the current economic climate.
"Despite perceived tensions in the Middle East and jitters in the Eurozone, demand for OF [overseas Filipino] workers may hold steady, keeping OF remittance growth at 7% for 2012 and domestic spending power healthy. Still, as the risk of a drop in exports or private investment spending remains substantial, the BSP would be prepared to cut the policy rate by at most 50 basis points," the research said.
With positive steps in place to secure the growth and continual expansion of the Philippines economy, a number of international investors are looking to secure opportunities within the real estate sector including
apartments in manila which are marked as one of the most attractive residential property markets in Asia today.
