Macroeconomic indicators showed growth in government spending, manufacturing output and overseas Filipino workers’ (OFW) remittances in the second quarter of 2014, likely boosting consumer spending which must have added fuel to the economy during the period, the central bank said.
“There was growth in manufacturing in the second quarter and a pickup in government spending in June. The remittances continue to be positive in terms of growth rate, which is more than 5 percent on average. So, these would provide a boost to consumer spending,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in an e-mail to reporters.
The latest government data pointed to a continued surge in production in the printing industry, resulting in double-digit growth in the manufacturing sector both by volume and value.
In June, the Volume of Production index recorded year-on-year growth of 13.3 percent, while the Value of Production Index registered growth in manufacturing output of 10.1 percent. Both indices were measured in the Monthly Integrated Survey of Selected Industries conducted by the Philippine Statistics Authority.
At the same time, total government disbursements reached P987.7 billion in the first six months of 2014, higher by P97.0 billion or 10.9 percent than the P890.8 billion recorded for the year-earlier period. In June alone, expenditures for the month rose by 44.1 percent year-on-year.
“Government accelerated spending in June and I think they are still trying to continue that acceleration in the third quarter,” Tetangco said.
Meanwhile, personal remittances by OFWs hit a six-month high in June, with $2.3 billion, rising 7 percent from a year earlier. Six months to June remittances reached $12.7 billion, up 6.2 percent over the comparative period in 2013.
All of these indicators, according to Tetangco, point to the continued strength of the economy as supported by consumers’ purchasing power.
“We believe that consumer spending will be robust,” he said, adding that the central bank expects the gross domestic product (GDP) growth rate to be sustained this year.
Coming from a lower than expected 5.7-percent GDP growth in the first quarter, the government remains optimistic that final data would show a recovery in the economy during the second quarter.
Second-quarter GDP results are scheduled for official release on August 28.