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Philippines: Q3 GDP growth ‘likely steady at 6.5%’
Philippine economic growth was likely steady in second quarter given continued domestic spending and export gains, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said on Monday.
“Solid domestic demand, spurred by national government and consumer spending and rising external demand, appear to be in synch to ensure another 6.5 percent gross domestic product (GDP) growth in third quarter,” the investment bank and private educational institution said in the latest issue of their joint “The Market Call” report.
The economy grew by 6.5 percent in the second quarter, picking up from 6.4 percent in the first three months of the year but down from the 7.1 percent posted a year earlier.
Year to date growth, at 6.4 percent, remains just below this year’s 6.5-percent to 7.5-percent goal.
Third-quarter GDP results are scheduled to be released by the Philippine Statistics Authority on November 16.
Consumer spending, FMIC and UA&P noted, should have increased “following above-12 percent peso remittance gains in the three months ending July and national government spending in its fourth consecutive month of double-digit rise by August.”
“We believe that the healthy growth remittances (in both dollar and peso value) will provide a big boost to consumer spending in the second half,” they added.
Year to date personal remittances totaled $17.8 billion as of end-July based on Bangko Sentral ng Pilipinas data, 5.9 percent higher than the previous period. Cash remittances also increased by 7.1 percent to reach $2.3 billion.
Government spending, meanwhile, reached P201.6 billion in August, 13.9 percent higher than the yearago level.
“We maintain our view that national government spending will continue at an elevated pace anchored on the administration’s determination to fast track the roll-out of big-ticket infrastructure projects,” FMIC and the UA&P said,
Exports sales also picked up in July to $5.3 billion, an 11-percent gain.
“We believe that exports will continue to expand at a double-digit pace buoyed by strong global demand (i.e., United States, European Union, China, and India),” they pointed out.
In addition, the peso’s real depreciation of 5.5 percent in September from December last year — as measured by central bank’s Real Effective Exchange Rate — should provide fuel to this expansion.
“Thus, we think that gains in exports will further augment the fast-growing domestic demand,” FMIC and the UA&P said.
Source: http://www.manilatimes.net/q3-gdp-growth-likely-steady-6-5/358384/