The gross domestic product (GDP) growth of the Philippines for the second quarter of the year is seen to settle at 7.5 percent or higher with the “strong fundamentals,” decrease in inflation and other economic improvements, according to First Metro Investments Corp. (FMIC) and University of Asia and the Pacific report on Wednesday.
In their monthly capital markets research The Market Call, FMIC Chairman Roberto Juanchito Dispo indicated that GDP growth is seen to hit “7.5 percent or higher” for the second quarter of the year, attributing it to high Manila Electric Co. (Meralco) electricity sales, manufacturing expansion “despite export weakness” as well as the improvements on residential construction.
He said that though second-quarter GDP is expected to go up, the growth rate for the second half may have “a slight slowdown in expansion” because Meralco sales uprise in the second quarter, overseas Filipino workers remittances having a higher peso equivalent, as well as the “likely recovery of exports as the US economy picks up strength.”
“We expect another above-target expansion of 7.5 percent or higher gross domestic product in second quarter of 2013. This may slow down a bit in second half, but the full-year growth should easily exceed the government’s target,” Dispo said.
Despite the projected high Meralco revenue, manufacturing and residential construction expansion, the 7.5-percent projection is lower compared to first quarter’s 7.8-percent GDP growth—because of export weakness and slowing of government spending on infrastructure, as indicated in the report.
“Government spending on infrastructure still sizzled at 35.9 percent, although again this was a bit weaker than the 50.1-percent surge in the first quarter,” The Market Call stated.
“Manufacturing output [is]expanding strongly despite export weakness,” it added, emphasizing industrial production in May that went up by 21.7 percent that is “pointing towards acceleration in the manufacturing sector.”