Q1 GDP growth seen at 6.4% -7.3% in Q1


Faster vs Q4, may be down from yr-earlier — analysts
KEY macroeconomic indicators point to a still healthy but slower expansion in the Philippine economy in the first quarter of 2015, compared with the fourth quarter of last year, thanks to robust domestic demand and higher government spending, particularly in infrastructure projects, analysts said.

In separate studies, Moody’s Analytics, Bank of the Philippine Islands and Accord Capital Equities Corp. put their estimates of growth in gross domestic product (GDP) for January to March at between 6.4 percent and 7.3 percent, gaining momentum from a 5.6 percent increase a year earlier.

Compared with the year-earlier rate of 6.9 percent, however, the Q1 estimated range’s low end shows a slowdown while the upper end shows the rate picking up speed.

The government is scheduled to release the official first-quarter GDP data on May 28.

Analysts from Moody’s Analytics were the most optimistic, saying GDP in the first three months likely expanded by 7.3 percent.

“Higher infrastructure investment and government spending, alongside robust domestic demand, make the Philippines one of Asia’s strongest performing economies,” they said.

Justino Calaycay Jr., analyst at equities firm Accord Capital Equities Corp., took a more conservative view, with a growth projection of between 6.4 percent and 6.7 percent for the period.

“We think that the key driver for GDP in the first quarter would be the spillover of consumer spending from the holidays induced in the fourth quarter of 2014, which in no small way got a significant boost from the huge fall in oil prices and the relatively benign inflation—thus expanding purchasing power,” Calaycay explained.

The analyst added that the economy in the three-month period was supported by sustained remittances from overseas Filipino workers.

The latest available data from the central bank showed that total remittances for the first two months of 2015 rose 2.1 percent to $4.08 billion from the $4 billion recorded in the same period in 2014.

Meanwhile, Nicholas Antonio Mapa, associate economist at BPI, said GDP in the three months to March likely grew by 6.8 percent on the back of domestic consumption and investments.

Mapa noted that car sales, a key contributor to the durable equipment component of investments, recorded strong growth in the first quarter.

He added that while consumption is still seen being robust, its growth pace may have slackened somewhat due to a slowdown in remittance inflows noted in January and February.


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