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FMIC projects 7%-7.5% growth for country’s GDP in 2014

7_graphFirst Metro Investment Corporation (FMIC) expects the Philippine economy will grow 7.0 percent to 7.5 percent this year on the back of the country’s strong fundamentals.

The investment banking arm of the Metrobank Group said the country’s fundamentals will remain intact and will be able to withstand local as well as global volatilities in 2014.

“The country has shown resilience, we are sill the best performing economy in ASEAN with a 7.4 percent [gross domestic product] GDP growth in the first nine-months of 2013,” Francisco Sebastian, FMIC chairman said in a briefing.

FMIC’s 2014 forecast is within the government’s economic growth target of 6.5 to 7.5 percent.

In 2014, the Philippine economy will be buoyed by the same growth drivers that continue to fuel the GDP plus the robust reconstruction and rehabilitation work in typhoon and earthquake stricken Visayas, which will further spur public and private spending.

FMIC also said that the overall economy will not be affected by the 2 percent drop in agriculture output due to natural calamities in 2013.

Likewise, FMIC projected that increase in consumer prices will remain manageable this year at 3.8 percent to 4 percent, which is within the central bank’s target of 3 percent to 5 percent.

“Inflation is likely to continue its upward movement in the early part of the year but it is anticipated to decelerate before the year ends,” FMIC said.

On the other hand, growth in overseas Filipino remittances, one of the country’s key economic indicators, is projected to increase 6 percent to 7 percent in 2014.

FMIC said overseas Filipinos are expected to increase their remittance to their families, particularly to those affected by the natural disasters in central Philippines.

The Bangko Sentral ng Pilipinas (BSP) has forecasted that OFW remittances will grow 5 percent this year.

“Demand for Filipino workers overseas will be sustained which will continue to stimulate and increase domestic consumption,” FMIC said.

As remittances are expected to continue increasing in 2014, FMIC, meanwhile, expects further softening of oil price from an average of $98.42 per barrel last year to $95.

The local currency, on the other hand, is seen to be between $43 and $46 against the US dollar this year, while the country’s exports and imports are projected to grow 6 percent to 10 percent, and 8 percent to 12 percent, respectively.