The Philippine economy likely grew at a faster pace of 4.8 percent in the first quarter of 2012 from 3.7 percent in the previous quarter mainly on the back of recovery in export earnings, international financial services firm HSBC said.
In its latest report on the Philippines, HSBC said the growth in exports in the first three months will provide a boost to the overall economy, which last year suffered from contraction of earnings from sale of goods to foreign markets due to sluggish performance of Western economies.
HSBC said the slowdown in the growth of remittances in the first quarter might have dragged the pace of increase in domestic consumption lower, but this was more than offset by the rebound in export revenues.
“As such, we expect GDP [gross domestic product]o accelerate in the first quarter on the back of stronger growth contributions from net exports and government spending,” it said in the report.
Data from the National Statistics Office showed that in the first quarter, the country’s merchandise exports amounted to $12.86 billion, up by 4.6 percent from $12.29 billion in the same period last year.
Economists said the single-digit growth in exports was already a welcome development especially since the country suffered from exports contraction in 2011.
They said the outlook for exports this year remains uncertain given problems still hounding the US and eurozone economies, but HSBC said the growth in the first quarter would be enough to help the economy post accelerated growth.
On remittances, the BSP earlier reported that these grew year on year by 5 percent in the first quarter to $4.8 billion. Monetary officials said the rise in remittances was an indication that overall income of overseas Filipino workers is not significantly affected by the debt crisis in the eurozone and the sluggish performance of the US economy.
HSBC noted, however, that the rise in remittances reflected a slowdown after a 7-percent rise registered for 2011.
Remittances from the estimated 10 million Filipinos based offshore—a closely watched economic indicator—help fuel at least 10 percent of households in the Philippines.
The government has set a goal for the economy to grow between 5 and 6 percent this year, with budget officials saying public spending is being boosted to help achieve the target.
The consensus among economists from the private sector, however, is that the Philippines will manage to post a decent growth rate but will likely fall short of 5 percent.
Last year, the economy grew by an average of 3.7 percent, thus slowing down sharply from the 7.6 percent registered in 2010. The slowdown, which the government wants to reverse this year, was blamed on anemic public spending and on drop in export revenues.