Q2 growth seen at 8% on higher infra spending

MANILA, Philippines - The fund management unit of Metropolitan Bank & Trust Co. (Metrobank) has forecast the Philippine economy to expand by an even stronger eight percent in the second semester of 2013, driven primarily by infrastructure spending of both the public and private sectors.

First Metro Asset Management Inc. (FAMI) president Augusto M. Cosio Jr. said the country’s gross domestic product (GDP) could grow between 7.5 to eight percent for the whole of 2013.

GDP grew 6.6 percent in 2012 and registered a higher-than-expected 7.8 percent expansion in the first three months of the year.

Government growth target remains at between six to seven percent for 2013, and 6.5 to 7.5 percent next year.

Aside from the entry of major infrastructure projects, Cosio said the export sector would move up aggressively as demand from the developed countries increases as their economics stabilize.

“The export market is starting to regain momentum,” he said.

Last year, the export market was weak as the developed countries were reeling under the pressure of an economic crisis.

However, the US economy is steadily recovering, along with Europe and Japan.

Cosio pointed out that 40 percent of Philippine exports find its way to intra-Asian trade, and another 40 percent to the developed countries.

Cosio said public infrastructure spending is moving with numerous repair activities for roads and bridges.

 â€œThe money is going to the right places,” he said on the sideline of an investors briefing.

But for long-term sustainable growth, he said the manufacturing sector must be revitalized in a big way.

“We have to open up new industrial estates,” Cosio added.

The agriculture sector grew 2.7 percent last year, and has likewise been tagged as a major link for improving the employment and underemployment gap while keeping inflation at bay with stable food prices.