Economists forecast faster growth in Q2

MANILA, Philippines - The economy is seen to have grown at a faster pace in the second quarter from the 5.2 percent expansion in the first three months of the year, according to the latest Market Call of First Metro Investment Corp. and the University of Asia and the Pacific.

 “The early second quarter signs point to a definite recovery from the measly 5.2 percent gross domestic product growth in first quarter,” the report said.

 “Although there are still some negative signals, the outlook looks more promising,” it said.

Sales of Manila Electric Co. (Meralco) went up in May across the commercial, residential and industrial segments as demand for electricity climbed 3.3 percent because of lower charges.

FMIC and UA&P also noted public spending, the lack of which was blamed for the anemic first quarter economic performance, increased nine percent to P156.5 billion in April.

 “NG (national government) spending on infrastructure developments and other key projects need to be sustained to fire up the economy, and the upcoming elections and lower inflation provide sufficient reasons to believe that spending will increase in the coming months,” the report said.

Merchandise exports, however, fell 4.1 percent in April despite the 17.8-percent hike in shipments of electronic products.

FMIC and UA&P said while exports data in the first quarter reflected the weak activity in Japan, China, and the US, an uptick should be expected in the second half of the year amid expected recovery in the US and Japan.

At the same time, remittances from overseas Filipino workers and earnings from the business process outsourcing sector remained strong in end-March, supporting bullish prospects for the domestic economy.

 “We see some mixed signals from real sector indicators, like industrial production which is likely to be lower than five percent in second quarter,” FMIC and UA&P said.

The economy grew by only 5.2 percent in the first quarter from 5.6 percent in the same period last year.