The Philippine economy most likely regained momentum in the second quarter of the year on the back of robust government spending and stronger exports receipt, private analysts predicted based on recent signs of improvement after the first-quarter slowdown.
The country’s gross domestic product (GDP) likely grew at about 6.3 percent in the current quarter following the lower-than-expected 5.7-percent growth in the first three months, financial firm First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in the June issue of their Capital Markets Research alliance’s publication, The Market Call.
“The hoped-for booster from relief and reconstruction spending in Yolanda-stricken areas has to wait for late second quarter, as the national government has just completed its comprehensive plan. This, together with revived exports, should easily enable the economy to grow faster [at around 6.3 percent]in the second quarter,” the report said.
However, its 6.3-percent GDP projection for the second quarter is still slightly lower than the government’s 6.5-percent to 7.5- percent growth target for the year.
FMIC and UA&P cited the national government’s fiscal performance in March, which showed that expenditures surged by 14 percent year-on-year amid higher reconstruction and rehabilitation-related disbursements, improving on the weak 4.6 percent gain in February.
The report said its economic outlook for the second quarter is in line with projections for improved export performance in the coming months.
“With the solid economic data emanating from the US economy, and the escape of the Eurozone from a two-year recession, we expect exports to take a double-digit growth path all the way to the third quarter,” FMIC and UA&P said.
They added that significant gains across major commodity groups boosted the country’s export growth in March. Total export earnings recorded $5.2 billion, increasing by 11.2 percent year-on-year, slightly slower than the revised 11.6 percent uptick in February.
The report also mentioned that Manila Electric Co. (Meralco) electricity sales to industrial firms gained 5.3 percent in May, which in turn suggests stronger exports in April.
“Meralco’s industrial electricity sales give us a firm basis for having a more positive outlook for the second quarter, underpinned by stronger export performance,” FMIC and UA&P added.