Economy gets boost from Q2 spending of gov’t

LOCAL economists, as well as a number of global financial institutions, expect the Philippine economy to have grown faster in the second quarter following a dismal first-quarter performance, but at a rate that would still make it difficult to hit the full-year goal of 7 to 8 percent.

Majority of the economists polled by the Inquirer last week said they see the second-quarter gross domestic product (GDP) growth settling below 6 percent.

The government will announce the second-quarter GDP growth figure on Thursday, Aug. 27.

The Department of Finance’s chief economist, Undersecretary Gil S. Beltran, told reporters higher government spending and more construction activities in the second quarter likely pushed the GDP up by 1.5 percentage points, but lower exports would pull it down by 1 percentage point, putting the second-quarter figure at about 5.7 percent.

Standard Chartered economist for Asia Jeff Ng said the bank expected 5.3-percent GDP expansion in the second quarter, as external demand was still weak even as the domestic economy looked stable.

ING Bank Manila senior economist Joey Cuyegkeng, for his part, made a forecast of 5.7-percent growth on the back of the El Niño’s impact on agriculture, weak exports and manufacturing, as well as an outperforming Philippine peso against other Asian currencies.

“But fiscal spending, especially infrastructure spending performance in the second quarter, is very promising for the rest of the year. The improvements in the second quarter are likely to continue in the second half, and hopefully in the first half of 2016 when El Niño’s effect could be at its highest,” Cuyegkeng said.

Metrobank’s Pauline E. Revillas and DBS Bank’s Gundy Cahyadi see the second-quarter GDP growth coming in at 5.7 percent.

BPI lead economist Emilio S. Neri Jr., for his part, said the economy likely expanded by 5.8 percent.

But for think tank Capital Economics, “growth in the Philippines looks to have picked up a little in the second quarter” to 6 percent flat.

For Moody’s Analytics, the Philippine economy likely grew by a much higher 6.8 percent due to “stronger government spending thanks to delayed stimulus getting underway likely lifted investment and household consumption. This boost will continue through the second half of 2015.”

The economy grew by a dismal 5.2 percent during the first quarter due to government underspending and weak exports.