In this video from Bloomberg, Rishaad Salamat and HSBC's Trinh Nguyen discuss the outlook for economic growth in the Philippines for 2013.
Some highlights:
- Indonesia is already investment grade and the Philippines is only expected to achieve investment grade at the second half of the year. Despite this, right now bond yields in Indonesia are higher than in the Philippines, implying that the credit rating upgrade is already "priced in" Philippine bonds and bond yields and prices won't be affected any further ("upgrade doesn't matter anymore"). The analyst, however, offers that the impending credit rating upgrade will affect the Philippine economy positively in other ways (e.g., lower borrowing costs for the Philippine government).
- The Philippines' Consumption-driven economy and booming demographics will allow it to have another strong year. Remittances at 20 billion USD will continue to drive local consumption. Other important sectors such as the BPO sector will continue to support the economy.
- HSBC predicts a 5% GDP growth in 2013. They also expect the Philippine peso to appreciate to 39.5 (to 1 USD) by the end of 2013.
