Strong growth sustained in Q2 – NEDA

MANILA, Philippines – Robust economic growth was likely sustained in the second quarter, driven by consumer and infrastructure spending, Socioeconomic Planning Secretary Emmanuel Esguerra said yesterday.

He said while they are still waiting for hard indicators to come in, gains from election-related spending are expected to contribute to growth in the April to June period.

“In the second quarter, I think infrastructure is there and consumer spending will still be an important aspect. I don’t see any drastic change between the first quarter (growth) drivers and the second quarter drivers. The election spending was already factored into the first quarter (growth) but it is still part of the second quarter so that would be an addition to whatever growth effect there will be,” he told reporters on the sidelines of the AmBisyon Natin 2040 Media Forum with the Economic Journalists Association of the Philippines (EJAP).

“At the very least (second quarter growth) would be the same as the first quarter. I don’t see it being worse,” he added.

The chief of the National Economic and Development Authority (NEDA) said the new economic team may indeed change the full year growth target of 6.8 percent to 7.8 percent this year.

“(This is the target) at the moment but I think when the new team comes in they may look at this and decide to change it,” said Esguerra.

Incoming socioeconomic planning secretary Ernesto Pernia earlier said an economic growth rate of 6.5 percent would be conservatively by realistic considering there would be a turnover of administration.

The incoming economic team has laid down a 10-point economic agenda, which builds on the growth strategy of the Aquino administration.

“It’s a continuation, essentially, that’s how we see it,” said Esguerra. “So far the market reaction to the new economic team has been positive. We hope the growth momentum would be sustained.”

The Philippine economy grew 6.9 percent in the first quarter of 2016 on the back of strong domestic consumption and government spending. This was faster than the five percent growth in the same quarter the previous year and was above market expectations.

Growth during the period was driven mainly by the services and industry sectors. The industry sector rose at a faster rate of 8.7 percent, the fastest in five consecutive quarters, supported by manufacturing, construction and utilities. The service sector, on the other hand, grew 7.9 percent on faster gains in trade, finance, real estate, renting and business activities.