“Higher-frequency indicators of demand including vehicle sales will sustain economic growth this year, according to BSP governor Amando M. Tetangco Jr. FILE PHOTO
MANILA, Philippines—The Philippine economy is expected to sustain its growth this year amid the acceleration of government spending, supported by the strong numbers in several leading economic indicators.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said indicators measuring both consumption and production were encouraging.
“Higher-frequency indicators of demand, including vehicle sales, energy sales and manufacturing output are still growing robustly,” Tetangco told reporters.
Data from the Chamber of Auto Manufacturers in the Philippines Inc. (Campi) showed car sales rose by 25.4 percent in March this year, accelerating from 16.5 percent the month before. The industry group expects sales to grow more than a quarter this year.
Factory output in February grew by 1.2 percent over the same month last year, slowing from 5 percent the month before.
Tetangco also cited the Purchasing Managers’ Indices (PMI) of the manufacturing, services and retail and wholesale sectors, which have also continued to point to an expansion.
For instance, in January 2014, all PMI sectors registered increases: Manufacturing PMI was at 55 compared to 50.1 registered in December 2013; services PMI at 60.1 from 56.4; and retailers and wholesalers PMI at 55.2 from 51.4.
The PMI, which is published locally by the Philippine Institute for Supply Management (PISM), is a measure of an industry’s health based on new orders, inventory levels, production, supplier deliveries and the employment environment.
A PMI score of more than 50 indicates a month-on-month expansion of an industry, while a score below 50 indicates a contraction.
“Output expansion is expected to be sustained over the coming quarters,” Tetangco said.
Other indicators that are expected to support economic growth include exports, which rose by 24.4 percent in February, and government spending, which was up 15.9 percent in January on the back of a 45.1-percent expansion in infrastructure outlays.
The government has set a more ambitious growth target of 6.5 to 7.5 percent this year, higher than the 2013 target of 6 to 7 percent. The Philippine economy grew by 7.2 percent last year.