The Philippine Online Chronicles

A joint study released by the University of Asia and the Pacific (UA&P) and the First Metro Investments Corp. (FMIC) and a separate study by credit ratings firm Standard and Poor's (S&P) both revealed that the Philippine economy will grow this year despite the ongoing global recession.

In a Manila Times Online article, S&P projected that the country's gross domestic product will grow by 3.7 percent this year while UA&P and FMIC, in a GMA News Online report, attributed this growth to foreign remittances, primarily from overseas Filipino workers, which will increase by six to eight percent this year.

Both “independent” studies foresee economic growth higher than government projections, which pegged it at 2.6 to 3.6 percent.

“As the export sector recovers and remittance flows revert to normal, external liquidity is expected to continue improving in the year, with further upside potential if election outcomes and subsequent policies succeed in boosting foreign capital inflows,” S&P associate director Agost Bernard said, while UA&P and FMIC said that the “accelerating” economic growth will come as a result of the “national elections and the rebound of exports.” The positive effect of the 2010 Elections, according to UA&P and FMIC, is due to “heightened elections spending.”

Despite the projected economic growth and a more stable global oil price, inflation will be at 4.3 percent while the Philippine peso will slightly weaken (P48 to USD1) by the second and third quarters of the year, according to UA&P and FMIC. The study added that the number of Filipinos working less than 40 hours a week will increase by 41 percent.