J.P. MORGAN has joined a slew of multilateral agencies, debt raters and other organizations in projecting Philippine gross domestic product (GDP) growth this year and in 2020 below government targets.

Investment bank J.P. Morgan’s “Global Watch: Asia” Economic Research note that was e-mailed to journalists on Monday showed Philippine GDP growth projections of 5.5% this year and 5.7% next year which are both below the official target bands of 6-7% and 6.5-7.5% for 2019 and 2020, respectively.

GDP growth, which clocked in at 6.2% last year, came in at 5.6% and 5.5% in the first and second quarters of 2019, yielding a 5.5% average last semester.

Among the 10 Emerging Asia economies, the Philippines 5.5% GDP growth outlook for this year is just above the 5.3% forecast average for the region and will be the third-fastest next to China’s 6.1% and India’s 6.2% and followed by Indonesia’s 4.9% and Malaysia, 4.3%.

And in the face of slowing inflation — projected at the central bank’s latest 2.5% forecast this year — J.P. Morgan said it expects the benchmark overnight reverse repurchase (RRP) rate to be cut by another 25 basis points (bps) to 3.75% in the Dec. 12 policy review after a cumulative 75 bps reduction this year left it at four percent as of September. The bank expects that rate to steady within 2020’s first half.

For this semester, J.P. Morgan cited an expected “capex and infrastructure recovery following the sharp decline earlier this year” due to the three-and-a-half month delay in national budget enactment and the 45-day ban on public works ahead of the May 13 midterm elections that resulted in muted infrastructure work in the first six months.

At the same time, the bank said data indicate that there is “no evidence yet of a material recovery” despite signs that consumption in the private sector has started to normalize in terms of motor vehicles sales and growth of household credit.

The Budget department reported yesterday that the government’s Notice of Cash Allocation (NCA) utilization rate stood at 97% as of September, now the same as a year ago, translating to P2.202 trillion used out of the P2.261 trillion released during the period. A higher NCA utilization rate reflects agencies’ timely disbursement of allocated funds to implement projects. — Beatrice M. Laforga

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