PH first quarter GDP growth revised down to 8.2% from 8.3%

The government on Monday said the Philippine economy grew a bit slower in the first quarter than previously reported.

The Philippine Statistics Authority (PSA) has revised down its first quarter gross domestic product (GDP) growth report to 8.2 percent, slightly lower that the 8.3 percent that was reported in May.

National Statistician Dennis Mapa told reporters that the slight change was expected as the PSA updated its data to reflect adjustments coming from other government agencies. About 30 percent of the data used in computing GDP come from other agencies.

“The major contributors to the downward revision were: real estate and ownership of dwellings, from 7.9-percent [growth] to 5.9 percent; manufacturing, from 10.1 percent to 9.8 percent; and wholesale and retail trade; repair of motor vehicles and motorcycles, from 7.3 percent to 7 percent,” the PSA said.

The government will report on the second-quarter GDP performance on Tuesday, Aug. 9.  Economists are forecasting a more than 8-percent economic expansion during the period.

In a report Monday, think tank Moody’s Analytics projected an 8.8-percent year-on-year second-quarter GDP growth for the Philippines despite elevated consumer prices.

“This follows four quarters of spectacular growth that have put the country on track to comfortably meet its GDP growth target [of 6.5-7.5 percent] in 2022. Private consumption and investment will buoy second-quarter growth, but higher inflation, rising interest rates, and fiscal consolidation will see the economic expansion slow in the second half of the year,” Moody’s Analytics said.

In another report Monday, Singapore’s DBS Bank said it was expecting the Philippine economy to have expanded by 8.6 percent during the April-to-June period.

“The economy, especially private consumption, likely benefited from opening gains as it operated with relatively looser mobility curbs due to a much-controlled pandemic. Election-related spending also added tailwinds, even though net exports remained a drag,” DBS economist Han Teng Chua said.

DBS  projected a  7.5-percent full-year 2022 growth for the Philippines — the highest in the region, despite headline inflation seen hitting an average of 5 percent or above the Bangko Sentral ng Pilipinas’ (BSP) 2-4 percent target band of manageable price hikes conducive to economic growth.

DBS also projected a still wide trade-in-goods deficit for the Philippines, estimated at $5.4 billion in June if imports grew by 23 percent to outpace 4.5-percent exports growth. The PSA will also release the June international merchandise trade data on Tuesday.

“The monthly goods trade deficit, which reached a record-wide level of $5.7 billion in May, likely stayed high in June and close to last month’s print. This was driven by continued faster import expansion versus exports due to the ongoing economic recovery and higher oil import bill,” DBS said.

Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco’s second-quarter growth forecast for the Philippines was 8.1 percent, below the first-quarter print.

“GDP growth probably slipped marginally in the second quarter despite an estimated 0.3-percent contraction quarter-on-quarter. Base effects are favorable; the economy shrank [quarter-on-quarter] only once last year, in the second quarter. Expect to see a fairly broad-based weakening quarter-on-quarter, with government spending and trade likely to exert the biggest drags on quarterly GDP growth. Investment looks to have held up, in spite of the election uncertainty, but downside risks prevail,” Chanco said in a report Monday.

Chanco also expects a slightly narrower June goods trade deficit amounting to $5.6 billion “thanks mainly to favorable seasonal factors” as “adverse base effects likely pulled year-on-year export and import growth down to 3.5 percent and 24 percent, respectively, from 6.2 percent and 31.4 percent [last May], masking a healthy month-on-month rise in both.”

Also, he projected the volume of net sales  to post  a slower 8-percent year-on-year growth in June from 11.1 percent in May.

The PSA’s monthly integrated survey of selected industries (Missi) for June will also be out on Tuesday.

“Short-term trends have deteriorated markedly in the face of high and rising inflation, while ‘reopening stimulus’ has plateaued,” Chanco said.