Full-year growth of the Philippine economy as measured by the gross domestic product is still expected to hit 6 percent this year, although this may turn out to be higher considering the first quarter result, according to the DBS Group.
The Singapore-based bank penciled in a conservative year-on-year first quarter growth of 5.8 percent, widely missing the officially reported figure of 7.8 percent.
“This headline growth figure has held above 7 percent for the past three quarters and is all the more impressive in the first quarter as base effects are no longer favorable,” DBS said in research note.
Data from the National Statistical Coordination Board (NSCB) show that GDP grew by 7.2 percent in the third quarter of 2012. Also, last year’s fourth-quarter figure was revised to 7.1 percent from the previously reported 6.8 percent.
“In sequential terms, GDP expanded by an annualized 8.8 percent,” the bank said, noting that the strength of the domestic economy – rather than external factors – was the main reason why growth held up so well despite a strong downward pull from the contraction of exports.
According to the NSCB, total exports fell by 7 percent from a growth of 9.8 percent last year, mainly due to outbound shipments of goods falling by 8.4 percent.
“Notably, early signs of investment-led growth are starting to show with year-on-year gross fixed capital formation growth rising by double digits for three straight quarters,” DBS said.
NSCB data show that gross fixed capital formation grew by 19.4 percent in the first quarter and—in 2012—10.6 percent in the fourth quarter and 10.8 percent in the third quarter.
“The growth outlook for the remaining quarters (of 2013) remains sanguine as the economy remains in the sweet spot of high growth and low inflation,” DBS said.