By Manila Times/Manila

The Philippine economy as measured by gross domestic product (GDP) may grow at a faster pace in 2013, according to the February issue of The Market Call.
The publication said that the slight acceleration in electricity sales in December, the continued government spending focused on infrastructure and election spending were some of the factors for the faster economic growth in 2013.
“Heightened election-related spending in first quarter and part of second quarter, should provide the momentum to keep the economy humming at a similar or even faster pace than in the fourth quarter of 2012,” it stated.
GDP grew at 6.8% in the fourth quarter of 2012.
The Market Call also projected that inflation may settle at 3% level in the first two quarters of the year as good weather condition may stabilise food prices.
“Stable food prices as a consequence of better harvests and less devastating typhoons will offset the slight temporary upswing in crude oil prices and bring inflation rates for the first quarter in the low 3% level, and back to below 3% in the second quarter,” it added.
However, despite the positive outlook for the economy, the publication still warned the public about the appreciating peso. “But there’s a fly in the ointment for the long-term sustainability of the growth, which is the peso’s appreciating trend. This is because it puts exports, business process outsourcing industry (BPO), and OFW (overseas Filipino workers) remittances under serious threat,” it further said. The Market Call continued that after having a 6.8% year-on-year appreciation in 2012 by averaging P41.01 a dollar in December, the peso had momentous strength in January by landing on the P40.73 a dollar plane.
“At the current run, the peso looks like it has the tendency to settle at below P40:$1,” it said. The publication also mentioned that a spate of positive onshore news and negative offshore news provided cushion for the peso. It cited that Standard and Poor’s credit upgrade of the Philippines from BB+ “stable” to BB+ “positive” provides a favorable setting for the Philippine peso.