2nd quarter GDP growth seen at 6.3%

Economic growth likely started to accelerate in the second quarter of the year, pulled up by reconstruction efforts and higher demand for the country’s exports fueled by the recovery of advanced economies.

First Metro Investments Corp. (FMIC) said in a new report that growth would likely be at least half a percentage point faster in the April-to-June period of the year than the previous quarter.

“The hoped-for booster from the relief and reconstruction spending in Yolanda-stricken areas has to wait for the late second quarter as the national government has just completed its comprehensive [reconstruction] plan,” FMIC said in the June issue of its Market Call report.

“This, together with revived exports, should easily enable the economy to grow faster,” said the report, which was prepared together with the University of Asia and the Pacific (UA&P).

FMIC, the country’s top investment bank, sees gross domestic product (GDP) expanding by at least 6.3 percent in the second quarter. This would be faster than the first quarter’s 5.7-percent expansion, although still below the government’s goal of at least 6.5 percent.

In the first quarter of last year, the economy grew by 7.7 percent, which at the time was the highest in Southeast Asia.

The slowdown in the first three months of the year was attributed largely to supply chain choke points caused by Supertyphoon “Yolanda,” which damaged large parts of the country’s central islands late last year.

Higher spending to address these bottlenecks, FMIC said, should provide a boost to economic production.

Recent indicators, FMIC said, also suggested improving economic conditions in the second quarter. “A recent surge in industrial electricity sales give us a more firm basis for having a more positive outlook for [the second quarter], underpinned by stronger export performance,” FMIC said.

“With the solid economic data emanating from the US economy, and the escape of the Eurozone from a two-year recession, we expect exports to take a double-digit growth path all the way to the third quarter,” it said. Paolo G. Montecillo