The Philippines expects economic growth to have slowed to between 6.1 percent and 6.7 percent in the second quarter from a year earlier against 6.9 percent in the first quarter, a senior government official said yesterday. The government will announce the official second quarter GDP growth data on Aug. 30. "The 6.9 percent growth (in the first quarter) was a big surprise. No one expected that it will be repeated," said Dennis Arroyo, policy planning chief at the National Economic and Development Authority. Bangko Sentral deputy governor Diwa Guinigundo told reporters on Thursday annual gross domestic product growth in the second quarter was "in the neighborhood" of 6.9 percent. The Philippines had set a target GDP growth of 6.1 percent to 6.7 percent this year, up from 5.5 percent in 2006. Arroyo said the agriculture, fishery and forestry sector in the second quarter likely grew 3.3 to 3.7 percent; services at 7.2 to 8.0 percent; and industry at 6.1 to 6.7 percent. Growth in the services sector would have been driven by higher demand for transportation and communication, with passenger volumes up. Private consumption would remain a major growth driver as overseas Filipinos workers (OFWs) continued to send huge sums of money to their families back home. "OFW inflows are still growing. Inflation is subdued and interest rates low so there’s impetus for consumer spending and lending," Arroyo said.

After spending $ 20 million since its takeover for the management of the Philippine Plaza Hotel, the Accor Group of Hotels, the world’s third largest operator of multi-brands hotels, is holding serious talks with local hotel developers and owners for its aggressive expansion plans in the country. Bernd Schneider, general manager of Sofitel Philippine Plaza, said they are having a dozen ongoing negotiations with possible local partners. "At this stage, we have about one dozen of negotiations and two of them will be sealed soon," Schneider said. The negotiations would be for a combination of pure acquisition, development and as co-investor but predominantly for a joint development with the Accor Group as managing partners. "We are looking at the secondary cities’ capitals," Schneider said noting that there is a high demand for hotel rooms in the country whether it is for business or tourism. "Our occupancy rate has been on the high side," he said noting that Sofitel Philippine Plaza has an average occupancy rate of 70 percent in the first six months this year. The Accor Group, which is into all types of hotel operations from five star to down to three star hotels, is also looking at doing the same business model for its Philippine expansion programs. Aside from its long-term management contract for Sofitel Philippine Plaza, it also manages the Imperial Suites in Quezon City. (BCM)

Unless there is a sea change in the favorable outlook for Asia’s real economies, the region would be able to weather the current turmoil in the global equity and credit markets, Standard & Poor’s Ratings Services said in its latest report. According to a report published yesterday by Standard & Poor’s, entitled "Asian Economies Able To Withstand Current Liquidity Squeeze," most policymakers in these economies appear to have learnt their lessons from the 1997 Asian financial crisis, and an overview of Asian countries shows few signs of apparent weaknesses. "Asian economies have improved their banking systems, reined in fiscal deficits, brought down external debts, built up foreign exchange reserves, and improved their current account balances," Standard & Poor’s credit analyst Ping Chew said. However, Chew notes that capital inflows resulting from international investors’ search for yield enhancement have created some difficulties for a few central banks. Current market volatilities have also placed investors, borrowers, and policymakers in a state of uncertainty. Chew also highlights that easy financing has attracted many lower-rated borrowers to the market. "In Asia (excluding Japan/Korea) more than half of the corporate issuers with outstanding debt are rated sub-investment grade," Chew said.