The economy is seen expanding at an even faster pace in the second quarter with a boost from election-related spending, according to First Metro Investment Corp. (FMIC).
“While the bright outlook for the first quarter appeared to be a given, the second-quarter performance may not be far behind,” FMIC said in its latest joint report with the University of Asia and the Pacific.
The government last week reported the country’s gross domestic product (GDP) grew 6.9 percent during the first three months, the fastest expansion among major Asian economies. The Philippines’ growth in the first quarter surpassed China’s 6.7 percent, Vietnam’s 5.5 percent, Indonesia’s 4.9 percent and Malaysia’s 4.2 percent.
The actual figure, however, fell below FMIC’s forecast of above 7 percent.
Moving forward, FMIC said “government spending was likely to accelerate in the second quarter, centered on the elections … while big-ticket PPP [public-private partnership] projects were beginning to take off.”
Socioeconomic Planning Secretary Emmanuel F. Esguerra had said growth in the second quarter could breach 7 percent, making the economy “on track” to hit at least the lower end of the full-year target of 6.8-7.8 percent.
Public expenditures in the second half, meanwhile, were seen to be ramped up by incoming President Rodrigo R. Duterte’s plans to further hike uniformed personnel’s pay.
“If he would be able to swing this soon, then the government spending would experience a sudden jump upon implementation,” FMIC said.
Remittance inflows from Filipinos overseas would also continue to support consumer spending, FMIC added. “Overseas Filipino workers’ remittances continued to confound pessimists and we think they would expand a bit below 5 percent in the second quarter.”
Exports, however, would continue to drag down growth, FMIC said. Ben O. de Vera