Philippines economy expands faster in Q1 – Moody’s
MANILA, Philippines – The economy grew at a faster rate of 6.9 percent in the first quarter, fueled by rapidly increasing private investment and consumption, according to Moody’s Analytics.
In its latest Asia Economic Preview, the economic research and analysis arm of Moody’s Corp. said the first quarter gross domestic product (GDP) growth was faster than the 6.6 percent expansion booked in the fourth quarter last year.
“Domestic demand continues to be the main driver, with private investment and consumption increasing rapidly. Positive demographic factors and rising incomes are supporting consumption,” it said.
Moody’s Analytics said exports would continue to recover this year.
The country’s merchandise exports jumped 21 percent to $5.58 billion in March from $4.61 billion in the same month last year, according to latest data from the Philippine Statistics Authority (PSA).
“Net exports should also be a positive, as merchandise exports have recovered in recent months and service exports continue to perform well,” it said.
Socioeconomic Planning Secretary Ernesto Pernia earlier said the country’s GDP likely grew seven percent in the first quarter, the middle point of the target range of 6.5 to 7.5 percent penned by economic managers.
On the demand side, strong household consumption and government spending are expected to drive the economy.
“Consumption and government spending will continue to be a major factor,” he said.
On the supply side, Pernia said the agriculture sector is expected to perform better this year and the construction industry is expected to become a major driver of growth.
Pernia, however, flagged several internal and external risks to the domestic economy. External risks include uncertain policy shifts in the US and slowdown in emerging economies such as China.
Internal risks include weather disturbances and possible delays in the implementation of public infrastructure.
He also identified among domestic risks “policy inconsistencies in several areas” as well as the environment department’s decision to close several mines.
The Philippines emerged as the fastest growing economy in the region with a 6.9 percent growth last year as election related spending boosted consumption as well as higher investments. This was faster than the 5.9 percent GDP expansion registered in 2015.