Market Research Report
Philippines Country Risk Report Q1 2020
|Published by||Fitch Solutions, Inc.||Product code||203087|
|Published||Content info||69 Pages
Delivery time: 1-2 business days
|Philippines Country Risk Report Q1 2020|
|Published: October 25, 2019||Content info: 69 Pages||
We have revised down our economic growth forecast to 5.7% and 6.1% in 2019 and 2020 respectively, from 5.9% and 6.3% previously, owing to softer external demand and less fiscal stimulus.
We expect the Banko Sentral Ng Pilipinas to adopt a cautious approach over the coming months, keeping its key policy rate unchanged at 4.00% in 2019 and delivering a further 25bps rate cut in 2020 to 3.75%.
A shift away from the West and Duterte's more populist rhetoric could upset existing trade relations with major economic partners like the US and the EU. The Philippines is increasing economic linkages and exposure to China (and moving away from the West), at a time when the US and China are experiencing rising trade tensions. A deteoration in US-China trade relations could weigh on demand across the Asia region and weaken Chinese investment into the Philippines.
Philippines' twin deficits leave it somewhat exposed to a sudden bout of risk-off sentiment, with inflation a risk were the peso to weaken significantly.