Despite faster growth in succeeding quarters
MANILA, Philippines — The country’s economic growth would likely pick up pace in the succeeding quarters as government catches up on its spending but full-year growth can still be expected to settle at a modest six percent this year, London-based Capital Economics said.
“A rebound in government spending is likely to provide a boost to GDP growth in the Philippines over the next few quarters,” the think tank said in a new report.
“It is likely that spending will accelerate further over the coming months, as delayed government infrastructure projects are brought on line,” it added.
The economy grew by just 5.6 percent in the first quarter due to the delay in the passage of the 2019 national budget which was enacted into law only in April.
On Thursday, Socioeconomic Planning Secretary Ernesto Pernia said growth in the second quarter of the year may settle at a little over six percent, supported by election-related spending but still reflecting the delay in the passage of the 2019 national budget.
This may be a flatish growth from the 6.2 percent pace in the second quarter of last year.
“Well, takes time to get started,” Pernia said in an interview yesterday on the sidelines of the 27th Metro Manila Business Conference.
He noted, however, that growth can be expected to pick up in the third quarter as the government implements its catch-up plan for spending on programs and projects.
“(Second quarter growth will be) more than six percent but it will not be as strong as the third quarter would be,” he said.
Growth in the succeeding quarters, he said, are expected to be supported by strong consumption, lower inflation and strong business confidence.
For the full year, Pernia sees growth settling at 6.5 percent, still more optimistic than market expectations of six percent.
He noted that economic managers are mindful of external and domestic risks that may affect growth this year such as policy movements overseas, the broadening effect of the US-China trade war and natural disasters that usually occur in the second half of the year.