The National Economic and Development Authority (NEDA) expects a slower Philippine economy in the second quarter of the year, saying gross domestic product (GDP) should be just about the same pace recorded in the first three months of 2017.
“Hopefully, it could be around the first-quarter performance at least for the second quarter,” Socioeconomic Planning Secretary Ernesto Pernia told reporters in an interview.
The Philippine economy grew by 6.4 percent in the first quarter of the year and by 7 percent a year earlier.
This year, the government is aiming for 6.5 percent to 7.5 percent.
“I have to be more conscious now because it’s after election year. And when you go back to 2011, the whole year was down from 2010,” Pernia noted.
In 2010, which was an election year, GDP grew by 7.6 percent. But growth slipped to 3.7 percent in 2011.
“Because of the base effect, as you know, we also had a high growth rate of 6.9 percent in 2016. In 2017, we may also experience the same fate, which I hope [will not be]as deep a dive as in 2011. So I am being more modest this time on the forecast,” he added.
In the second quarter, the drivers of growth will be the surge in government spending, and the growth in manufacturing and exports, the NEDA chief noted.
Latest data showed that national government disbursements rose by 20.4 percent to P261.7 billion in May. Spending rebounded from a 4.5-percent contraction in April.
“And also, I understand that factory output went up significantly. And exports, I think. So it’s better to be on the safe side,” Pernia said.
In May, the Volume of Production Index rose by 5.8 percent from 4.3 percent in April. The Value of Production Index increased by 3.6 percent from 2.5 percent.
Exports, grew by 19.1 percent in April and by 13.7 percent in May.