Here's why Philippines is all geared up for a 6% GDP growth

"Many things went right," says analyst.

According to DBS, GDP growth for 4Q will be announced this Thursday and growth of 6.0% YoY has been penciled into the firm's forecast. Many things went right in 2012. 

Growth has consistently outperformed consensus expectation (and is likely to surprise on the upside again for 4Q), inflation has stayed low and credit growth has been
moderate.

These goldilocks conditions has enabled the central bank (BSP) to keep the overnight policy rate low, facilitating private consumption and investment growth.

Here's more from DBS:

Moreover, government expenditure has been a major tailwind after bottlenecks in spending seen in 2011 were undone. On the external front, although there was no recovery in electronics shipments, other forms of manufacturing performed better, helping to mitigate some of the net export drag over the last three quarters.

Positive momentum will spill over into this year. With general elections due in mid-2013, government spending has already ratcheted up and is likely to stay elevated before easing in 2H.

Delays in the public-private partnership (PPP) projects have resulted in limited progress since the program was launched in November 2010.

Things were notched up in the final two months of 2012 and a total of eight projects were rolled out. Construction on projects bid out early this year should provide a boost to headline GDP growth.

On the external front, stabilization in the major economies and a turnaround in China imply better support for exports. The upswing in the electronics cycle will be more difficult to predict.

With a concentration in semiconductors, electronics export recovery appears has been lagging. In any case, growth is still expected to be on the strong side this year.