The Philippine economy is seen to grow at a faster pace in the next three quarters, boosted by increased public spending and an anticipated improvement in exports, the National Economic and Development Authority said.
The 6.4-percent growth in gross domestic product (GDP) posted in the first quarter would serve as a “springboard” for the next three quarters, Economic Planning Secretary Arsenio M. Balisacan told reporters.
“We have already completed April and May, we have not seen any major shocks. In fact, what I’ve been hearing from the business community [is] quite positive. So far I think that the second quarter outlook will be quite good,” Balisacan said.
Balisacan said the economy could sustain its first-quarter growth and could even increase its momentum to reach 7 to 8 percent for the full year. This is the average annual GDP growth targeted under the Philippine Development Plan 2010-2016.
The government’s “fighting target” for 2012 alone is 5-6 percent GDP growth. “We should exceed this growth rate to achieve poverty reduction in the country,” Balisacan said.
Balisacan said the latest improvement on several governance and competitiveness indicators, including Moody’s recent change of outlook on the country’s Ba2 rating to “positive” from “stable,” indicated that the government’s macroeconomic targets for this year were achievable, given the synergy between the public and private sectors.
The government is supporting programs meant to combat poverty and attain the millennium development growth by 2015. The Department of Budget and Management would be infusing an additional P9 billion for priority poverty-reduction projects of participating government agencies through the bottom-up budgeting approach, Balisacan said.
The biggest allocation would go to the Department of Agriculture (P2.84 billion), followed by the Department of Education (P2.6 billion). The Department of Health and Philippine Health Insurance Corp. will receive P1.11 billion, while the National Electrification Administration will get P993 million in fund support for its priority anti-poverty projects.
Electronics, which takes up the bulk of imports and exports, could recover toward the second half of the year, according to industry estimates. Semiconductor and Electronics Industries of the Philippines Inc. president Ernesto B. Santiago said in a phone interview that imports could have fallen during the period March to May compared with the corresponding months in 2011, when manufacturers secured supplies in reaction to the earthquake and tsunami that hit Japan. Electronics imports may recover starting in the third quarter not only because of the base effect but also as overall exports recover.
GDP in the second quarter is expected to exceed the 3.1 percent posted during the same period last year.
In 2011, exports dropped 6.9 percent due to the global economic slowdown. For this year, the inter-agency Development Budget Coordination Committee expects exports to grow 10 percent.