Q2 growth estimate pegged at 5.9%

MANILA, Philippines - Philippine economic growth in the second quarter could have been faster than the first quarter performance, the research arm of Metropolitan Bank and Trust Co. said, but added the figure remains below the government’s target.

“The second quarter Philippine GDP (gross domestic product) growth is expected to come in at 5.9 percent, underpinned by solid consumption spending, improvement in external trade, and acceleration in the manufacturing sector,” Pauline Revillas, research analyst at Metrobank, said in a report.

The figure is faster than the 5.7-percent growth recorded in the first quarter, but below the 7.6-percent growth recorded in the second quarter of last year. At the same time, the forecast is below the government’s 6.5- to 7.5-percent target for 2014.

Revillas said the second quarter economic growth was supported by strong consumer spending, expansion in trade, and improvement in the manufacturing sector.

 “Consumption spending was still driven by robust OFW (overseas Filipino workers) remittances which grew by almost six percent in the April to June period,” Revillas said.

Remittances, which made up 8.4 percent of the country’s GDP last year, support domestic consumption, the main driver of the Philippine economic growth.

 “The improvement in the economies of some of the Philippines’ major trading partners also supported the expansion in the trade front,” Revillas said.

“Furthermore, the growth in the manufacturing sector accelerated as industries adjusted to the effects of external conditions,” she said.