2011 economic growth seen at lower end of target
The Philippine economy will still grow by 4.8 percent this year despite an “increased lethargy” that is expected to follow a first-quarter performance that was on the lower end of government projections.
According to GlobalSource Partners, a New York-based think tank, the projected increase in government spending during the second semester also prompts it to maintain its full-year forecast for the Philippines.
First-quarter growth is “in line with our expectations and just barely hitting the tail end of the government’s 4.8 percent to 5.8 percent forecast,” GlobalSource said in a new research note.
GlobalSource noted that January-March gross domestic product growth was the lowest since the fourth quarter of 2009, and continues a trend of declining growth since the first quarter of 2010.
“At this time, we are still sticking to our projection of 4.8 percent growth for the year, though it is obvious the economy now confronts stronger head winds,” it added.
The think tank cited data on leading economic indicators from the National Statistical Coordination Board, which hint at slower economic activity in the second quarter.
“Additionally, the woes in Mena [Middle East and North Africa] combined with the continued sluggishness in Europe, point to remittances remaining relatively flat in the short term,” the paper said.
This indicated that it may just be a matter of time before inflows from overseas Filipinos start dragging down personal consumption, it added.
“On the bright side, the rest of the year may see a bump in government spending as the government is said to be looking at expediting the utilization of government budgets,” GlobalSource said.
Data from the Bureau of the Treasury show that in the four months to April, government expenses reached P461.4 billion, or 11.6 percent less than the P521.9 billion incurred in the same period of 2010.
In May, Budget Secretary Florencio B. Abad said expenditures have started to pick up in April as the use of notice of cash allocations improved.
