S&P lifts growth outlook for Philippines, trims rest of Asia

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MANILA - (UPDATE 2, 10:21 a.m.) Standard and Poor's has raised its growth forecast for the Philippines, even as estimates for other Asian economies were kept or worse cut, amid a weak global economy.

In a report, the international credit rating firm on Tuesday said it hiked the Philippines' 2012 growth forecast from 4.3 percent to 4.9 percent, "reflecting the ongoing strength of that domestic economy" for this year.

The Philippines' gross domestic product rose 6.1 percent in the first six months of the year, making it Asia's third best-performing economy next to China and Indonesia.

Consumer spending fueled by overseas worker remittances, which have not let up despite the bleak world economy, as well as growth in the services sector, led by the country's business process outsourcing industry, have kept Philippine GDP expansion on an even keel.

In cnotrast to its upbeat outlook for the Philippines, S&P lowered its base case forecasts for 2012 real GDP growth by about half a percentage point for China to 7.5 percent, Japan to 2.0 percent, Korea to 2.5 percent, Singapore to 2.1 percent, and Taiwan to 1.9 percent.

It also has revised its forecast down by about one percentage point each for Hong Kong to 1.8 percent and India to 5.5, while it shaved less than a percentage point for Australia to 3.0 percent from 3.2 percent.

"Naturally, any worsening of the economic conditions in the Eurozone will increase contagion risk for Asia Pacific, given the region's - particularly the open economies' - sensitivity to capital flows and trade,” said S&P credit analyst Andrew Palmer.

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