DOF sees at least 7% growth in Q2

The economy likely grew by at least 7 percent in the second quarter on the back of faster government spending as well as recovery in the export and agriculture sectors, the Department of Finance’s chief economist said.

Finance Undersecretary Gil S. Beltran told reporters last week that “it’s possible” for the gross domestic product to have had expanded within the 7-7.2 percent range during the April to June period, faster than the slower-than-expected 6.4-percent growth in the first quarter.

The government will announce the country’s second-quarter economic performance on Thursday, Aug. 17.

“The second-quarter GDP [growth figure] will be a lot better than the first quarter’s, because exports for the first half were up 13.6 percent; last year, they were negative [down] 3.5 percent,” Beltran said.

“And net expenditures were up 8.8 percent—if you compute the first quarter and the second quarter [expenditures], the difference is huge: 13.6-percent [growth] in the second quarter and 4-percent in the first quarter,” Beltran noted, adding that higher government expenditures “will push up growth.”

Also, “agriculture was up 5 percent [in the first quarter] and we expect that to be true for the second quarter as well; last year, it was negative 3.5 percent, so these numbers are much better than what we saw last year and in the first quarter,” Beltran added.

On Tuesday, the Philippine Statistics Authority reported that the agriculture sector grew by 6.18 percent in the second quarter.

Last week, the country’s chief economist said over 7-percent growth in the second quarter was “possible” on the back of faster public spending and sustained robust private consumption.

Socioeconomic Planning Secretary Ernesto M. Pernia told reporters that he had a “hunch” that second-quarter GDP growth “will be better” than the first-quarter figure.

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.”

“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. On Monday, the peso closed at 51.08:$1.

Pernia earlier told legislators that the country “remains on track in meeting the midrange of its full-year target of 6.5-7.5 percent GDP growth for 2017.”

The Neda chief 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.