By Karen Lema
MANILA, Dec 11 (Reuters) - The Philippine economy may post its slowest growth in eight years in 2009 as a global recession crimps export demand and domestic consumption shrinks due to lower remittances from workers overseas, a Reuters poll showed.
Ten economists polled by Reuters forecast gross domestic product would rise 3.3 percent in 2009, substantially lower than the 4.7 percent in a similar poll in September and below the government's estimate of 3.7-4.7 percent growth.
All economists revised down their 2009 forecasts to account for the impact of the worst financial crisis in decades on the export-driven country of 90 million people. Forecasts ranged from 0.7-4.1 percent for 2009.
"Our view that the Philippine economy will suffer a sharp slowdown remains as the global recession clearly gained pace in fourth quarter after the series of financial shocks in October," said Simon Wong, an economist with Standard Chartered Bank in Hong Kong, said.
"As such, we expect Philippine exports to contract in coming months and well into the first half of 2009 and remittance growth to slow to low single-digit in 2009, thus cooling off domestic consumption," Wong said.
The International Monetary Fund has forecast growth to slow to 3.5 percent next year after 4.4 percent projected for this year.
The Reuters poll forecasts 2010 growth at 4.8 percent.
The Philippine economy grew 7.2 percent in 2007, its strongest pace in three decades.
Remittances from Filipinos working overseas has played a large part in driving domestic consumption. They are still growing at double-digit pace but growth could slow to as low as 6 percent in 2009, central bank documents over the weekend showed.
Falling fuel prices are expected to reduce inflation to an average of 4.9 percent in 2009 from 9.5 percent this year, the poll showed. The Philippines imports nearly all of its crude oil needs.
Some economists expect monetary authorities to follow central banks around the world in cutting rates as early as this month to help shield the economy from the global financial crisis that pushed developed economies into recession. Results of the poll:
GDP CPI TRADE BALANCE*
pct change pct change ($ billion)
2009 2010 2009 2010 2009 2010 HSBC 2.3 4.8 5.0 4.3 -16.6 -18.0 Credit Suisse 3.5 N/A 4.7 N/A N/A N/A Royal Bank of Scotland 2.1 5.4 6.0 5.0 -14.8 -14.6 Citigroup 3.0 N/A 3.9 N/A -10.9 N/A JP Morgan Chase 3.5 N/A 4.7 N/A N/A N/A ING Bank 4.1 6.0 5.9 3.9 N/A N/A Ideaglobal 3.5 5.0 5.0 3.5 N/A N/A Standard Chartered 0.7 2.7 2.6 1.6 N/A N/A UBS 1.8 3.4 3.0 3.8 N/A N/A Informa Global Markets 3.8 4.0 8.5 N/A N/A N/A _______________________________________________________________ MEDIAN 3.3 4.8 4.9 3.9 -14.8 -16.3 Note: *For trade balance, only forecasts based on the central bank's balance of payments definition were included. N/A = No forecast given or estimate was based on a different definition. PESO/DOLLAR END-JUNE 2009 END-DEC. 2009 HSBC 52.00 52.00 Royal Bank of Scotland 49.70 50.0 Standard Chartered 49.75 47.90 UBS 52.00 48.0 InformaGlobal 51.00 N/A JP Morgan Chase 52.00 50.0 Citigroup 51.50 N/A ATR-Kim Eng 47.43 45.13 BDO Universal Bank 48.50 48.50 Action Economics 52.00 N/A _____________________________________________________ MEDIAN 51.25 48.50 Forecasts made in previous Reuters surveys:
GDP CPI TRADE BALANCE
pct change pct change (US$ bln)
2008 2009 2008 2009 2008 2009 Sept 2008 4.6 4.7 9.9 6.2 -12.7 -13.7 July 2008 5.1 5.0 8.2 5.0 -13.3 -17.3 Mar 2008 5.8 6.2 4.5 3.8 -9.0 -9.6 Dec 2007 6.1 n/a 3.8 n/a -7.2 n/a Sept 2007 6.5 n/a 4.0 n/a -7.8 n/a Historical data:
GDP CPI TRADE BALANCE*
pct change pct change (US$ bln) 2003 4.7 3.5 -5.85 2004 6.0 6.0 -5.68 2005 5.0 7.6 -7.77 2006 5.4 6.2 -6.73 2007 7.2# 2.8 -8.24 ------------------------------------------------------------- 5-yr avg 5.7 5.2 -6.85
NOTE: # Revised by the government.
* The trade balance historical data was based on the central bank's balance of payments definition. Trade data in previous poll stories showed actual figures based on customs' definition, which reflected just merchandise trade.