Over 7 percent growth in the second quarter is possible on faster public spending and sustained robust private consumption, the country’s chief economist said.
Socioeconomic Planning Secretary Ernesto M. Pernia told reporters late Wednesday that he had a “hunch” that second-quarter gross domestic product (GDP) growth “will be better” than the first quarter’s 6.4 percent.
The government will announce the second-quarter economic performance on Aug. 17.
Pernia, who heads the state planning agency National Economic and Development Authority, declined to provide a figure but said expansion higher than 7 percent was “still possible.”
The Neda chief said he was bullish due to “increase in government spending and infrastructure spending, and exports have improved.”
The government’s expenditures on public goods and services in the second quarter jumped 13.6 percent year-on-year to P715.5 billion, faster than the 4-percent rise in the first quarter,
Spending on infrastructure and other capital outlays grew 5.9 percent to P131.6 billion from April to June, a higher amount than the P117.5 billion spent from January to March.
Government data released on Wednesday showed that end-June merchandise exports climbed 13.6 percent to $31.04 billion.
“Agriculture, I think, also has better performance,” Pernia said.
“Consumption is also continuing. With the depreciation of the peso, families receiving remittances are able to spend more because of the higher conversion rate in favor of the peso, so there’s more spending money. So I think all those are going to contribute to higher growth,” Pernia added.
The peso slid to an almost 11-year low in late June, and since then stayed in the 50:$1 level.
Last week, Pernia said the country “remains on track in meeting the midrange of its full-year target of 6.5-7.5 percent GDP growth for 2017.”
Pernia had said it would be “possible” for GDP expansion to hit at least 7.2 percent in the remaining quarters to achieve 7-percent growth for 2017.
For the GDP to expand by about 7 percent this year, quarterly growth of 7.2 percent should be posted in the second to fourth quarters. JE