Economists see 5% GDP growth in Q1

MANILA, Philippines—Economists forecast moderate growth for the Philippine economy in the first three months despite coming off a high growth base in the first quarter of 2010, which enjoyed recovery in exports from 2009 and a boost from election spending.

Economic Planning Secretary Cayetano W. Paderanga Jr. said in an interview that he was hoping for as much as 6-percent economic expansion in terms of gross domestic product (GDP), banking on growth momentum before any disruption that would have been due to the earthquake and tsunami that struck Japan in mid-March.

Forecasts from economists asked by the Inquirer averaged about 5 percent.

“A growth of around 5 percent would be reasonable but we’re still hoping for 5.5 to 6 percent. We’re hoping reforms and fiscal discipline have started taking effect. Also, with 5.5- to 6-percent growth there would be less to make up for in the next three quarters,” Paderanga said.

What is more important, he said, was that growth should be sustained going forward.

Paderanga said that even with just a little growth in a short-cycle sector like agriculture, the economy could still make that up in the coming quarters. If it was manufacturing on the semiconductor exports side, that might be a short-term impact of the disruption due to the earthquake and tsunami in Japan, he said.

“We have to see where the growth is so that we will know how far we need to go to still attain the full-year growth target,” Paderanga said. The government is set to announce the country’s first-quarter GDP growth figures on May 30.

The Philippine economy boomed with a 7.3-percent growth in the first quarter of 2010 from a low base of 0.5 percent in the same period of the previous year, according to the National Statistical Coordination Board.

Benjamin Diokno, former budget secretary and an economics professor at the University of the Philippines, forecast a GDP growth of “between 4.5 to 4.9 percent” for the first quarter of 2011.

The services sector is still seen as a major growth driver, coupled with a single-digit growth for manufacturing and a 4.1-percent growth in agriculture that was already reported by the Department of Agriculture.