ING tabs Q2 GDP at 6%

MANILA, Philippines - ING Bank said the Philippine economy likely expanded at a slower pace of six percent in the second quarter of the year.

“The second quarter growth should be better than the first quarter of 2015, but slower than the 6.7 percent second quarter 2014 growth. We expect second quarter 2015 growth at six percent,” Joey Cuyegkeng, senior economist at ING Bank Manila, said.

The economy grew by a slower 5.2 percent in the first quarter of the year from 5.6 percent a year ago due to weak government spending.

Economic managers see the country’s GDP expanding between seven percent and eight percent this year.

Socioeconomic planning secretary Arsenio Balisacan earlier said the lower end of the growth target would already be a “big challenge” amid the country’s weak merchandise exports.

“The Philippine economy is not immune to the concerns of slower growth. Local growth concerns have also affected sentiment on peso,” Cuyegkeng said.

Likewise, he pointed out liquidity and loan growth slowed down in the second quarter relative to the pace of growth in the second quarter in 2014.

Likewise, he said the second quarter agriculture production has likely contracted due to the dry spell.

According to him, a more intense El Niño episode in the fourth quarter of the year and first quarter of next year would put more pressure on inflation.

“The positive development is the acceleration of government’s infrastructure spending in April and May although the improvement in headline government spending relative to second quarter 2015 is a welcome development,” he said.

Cuyegkeng said the Aquino administration is set to announce stronger government spending starting June.