Opportunity for SMEs: Philippine Q2 GDP Growth Quickens due to Construction Boom
Opportunity for SMEs: Philippine Q2 GDP Growth Quickens due to Construction Boom
The Philippine financial economy has grown at a sizzling pace of 6.5% in the second quarter of the year 2017 and has broken the records of the first quarter (which showed growth of 6.4%) and even went beyond what the government had forecasted - a growth of 6.2%.
This Southeast-Asian country has now become the 2nd fastest growing economy in Asia after China, due to government-sponsored construction spending and rebounds in the agricultural sector. Conversely, the construction boom has also contributed to the weakening of the peso with a recent increase in the importation of capital goods; thus, setting the first annual current account deficit in fifteen years.
The infrastructure drive reported an increase in public sector spending on construction projects by 12% in the 2nd quarter as compared to just 1.9% during the first quarter; however, the private sector building projects decreased to 4.7% from 13% in Q1. There is a noticeable shift from private to the public sector. Even so, developers are reporting huge profit gains in the range of 11-18%.
Finance Secretary Carlos Dominguez also hopes that accelerated government spending on construction activities and timely project implementations would keep the Philippines in the club of the fastest growing economies in Asia and perhaps in the whole world.
All of these factors have opened up new avenues for SMEs to be aware of, review for their consideration, gear up for, and successfully participate in. They can avail this opportunity and look for expansion into the construction sector. Since SMEs are inherently small and do not have a lot of spare capital, loans can be arranged from banks and other financial institutions to help kick-start an SME’s projects.
This is where CreditBPO comes in. When applying for a loan, banks dive deep into analyzing the creditworthiness of the applicant. This allows them to assess borrowers against their mandated level of confidence in accepting the credit risk associated with the transaction. At CreditBPO, we issue a credit rating for business loans within 24-48 hours of documents’ submission to help SMEs assess their creditworthiness before they send in their loan applications to a bank. This reduces an SME's wait time for bank loan approvals and presents the opportunity for lower interest rates for credit-worthy SMEs.
The CreditBPO Rating Report comes with advice on how to improve your credit rating. A more favorable rating opens up avenues to extended credit lines and larger loans, allowing for taking on larger projects with increased liquidity and higher gearing.