Security Bank Corp. sees next year’s economic growth to be at 6.5 percent, churning out P19.6 trillion in output from this year’s estimated P18.4 trillion.
The lender said the optimism is supported by the easing of restrictions that translates to a recovering domestic activity going forward.
The lender said economic indicators point to “encouraging prospects of economic recovery” given the “continued improvements in private consumption, manufacturing production, public infrastructure spending, and external trade that are expected to continue well into next year.”
Consumption is expected to grow 8 percent next year, cornering 75 percent of the projected output.
Herd immunity may be attained in the first half of next year given the current pace of vaccination initiative.
“This and the availability of Merck and Pfizer pills, plus a booster shot program, will help manage infection rates and lessen lockdowns,” it said.
Security Bank said with looser curbs, mobility data may reflect a strong rebound in domestic activity and improved sentiment.
“Remittances will remain a key component to rebounding consumption, with inflows continuing to grow as most host economies reopen,” it said.
Security Bank said investments will be supported by domestic consumption, manufacturing activity, business optimism, and elections spending offshoot, with overall growth during election years averaging 6.2 percent compared to non-election years’ 5.1 percent.
Security Bank also said government revenue collections are expected to pick up while expenditures will shift towards targeted spending towards stalled infra investments.
Exports are expected to grow 8 percent while imports will grow 10 percent, resulting to a wider trade deficit.
Inflation is seen to average at 3.5 percent, with an uptick likely due to global oil price movements, elevated commodity prices, external supply chain disruptions, and import-dependence on certain food items.
“Demand-pull will become more pronounced with consumption rebound,” it said, though stressing that “base effects will offset.”
Security Bank said this will give the central bank a moderated level to maintain an “accommodative stance in near to medium-term to support recovery.”
The peso is expected to close next year at 52 to the dollar.
