Bank of America sees sustained growth in Phl

Global banking giant Bank of America (BofA) has maintained its strong growth outlook for the Philippines, although slightly below government expectations, on the back of spending boost from election and further monetary policy easing from the central bank.

-  LOUISE MAUREEN SIMEON

BofA country head Vincent Valdepeñas said the bank is projecting that gross domestic product (GDP) for the Philippines will settle at six percent for 2024 and 2025.

The six-percent expectation is at the lower end of the government's target for 2024 but below the 6.5 to 7.5-percent assumption for next year.

“I think it’s already a strong outlook. And we do not see a lot of countries growing this high,” Valdepeñas said.

BofA, one of the world’s largest financial institutions, emphasized that expansion would be driven by both consumer spending and government expenses.

Valdepeñas said GDP growth would get a lift from the upcoming midterm polls in May 2025.

“There will be a lot of spending during this time and that will push the numbers within the range of six percent,” Valdepeñas said.

Apart from election-related spending, GDP growth is also seen benefiting from the continued policy easing of the Bangko Sentral ng Pilipinas (BSP) as inflation pressures dissipate.

On Oct. 16, the BSP brought down its target reverse repurchase rate to six percent from 6.25 percent in its second straight easing after four years.

This is not expected to be the last reduction for the year as BSP Governor Eli Remolona said another one of the same magnitude is likely in December.

For 2025, a 100-basis-point cut is also on the table.