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Food and energy inflation likely capped Philippine economic growth
to between 5.2 percent and 6.2 percent in the three months to March,
Socioeconomic Planning Secretary Augusto Santos said Friday.
This would be down sharply from 7.4 percent
posted in the last three months of 2007, when the Philippine economy
grew 7.3 percent for the whole year, the fastest in 31 years.
Santos said high food and energy prices likely
hit consumer spending in the first quarter.
Jonathan Ravelas, an analyst with Banco de Oro,
said, “A slowdown is expected, but I don’t think the
first-quarter figure will be very disappointing. Corporate earnings
were not as bad as previously anticipated, while government spending
likely contributed to overall growth.”
President Gloria Arroyo had vowed to spend more
to build roads, bridges, ports and schools in the early part of the
year to ease the pain from a faltering global economy and rising
prices.
Soaring rice and oil prices pushed inflation to
5.6 percent in the first three months of the year, well above the
government’s full-year target range of 3 percent to 5 percent,
while export growth slowed sharply to 2.7 percent in the same period
from 13.1 percent a year earlier.
The government will release economic growth data
on May 29.
“There’s a lot more uncertainty and
everybody’s holding their breath and worrying how much of a drag
there will be from higher inflation,” said economist David Cohen
at Action Economics in Singapore.
HSBC economist Frederic Neumann said, “The
Philippine economy likely expanded 5.9 percent year-on-year in the
first quarter, decelerating considerably from the fourth quarter of
last year, but still etching out a respectable growth rate amid
stiffer headwinds.”
Song Seng Wun of CIMB-GK in Singapore said the
Philippine farm sector’s decent growth in the three months to
March should have helped the economy expand 6.2 percent.
The government reported last week that farm
output rose 4 percent from a year earlier, outpacing the 3.3-percent
clip in the same period in 2007.
The government was previously looking at gross
domestic product (GDP) growth of 6.3 percent to 7 percent for 2008,
but officials are now reportedly looking at lowering the target to
between 6 percent and 6.7 percent. GDP refers to the value of all
final goods and services produced in a country within a year.
The central bank expects full-year inflation to
exceed its target, and economists see policymakers lifting interest
rates as early as next month to fight inflation.
-- AFP
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