A private bank analyst said higher government spending recorded in June must have also helped speed up economic growth in the second quarter of 2015.
“We welcome this development as it means we made the right decision in retaining our full-year growth forecast of 6.5 percent when the first-quarter 2015 GDP [gross domestic product growth rate of 5.2 percent]disappointed the market last May,” said Emilio Neri Jr., lead economist and vice president at the Bank of the Philippine Islands (BPI).
Neri stressed that boosting government spending could be the key to convincing investors that the Philippines is able to continue moving forward despite the global headwinds along its path.
“We are likely to see this sustained through the second half of 2015,” he added.
With this, the BPI economist said second-quarter growth in GDP should show at least 5.5 percent given the direct and multiplier effects of government spending.
“Hopefully, weaker exports in the second quarter and the impact of El Niño on agriculture would be outweighed by the trend of accelerating outlays by the public sector,” he said.