FMIC, UA&P see GDP growth of at least 7% in Q2

By Leslie Gatpolintan

July 23, 2018, 3:15 pm

MANILA -- First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) remain optimistic the Philippine economy will continue accelerating at 7 percent or higher in the third quarter and even into the fourth.

“We remain confident that second-quarter GDP (gross domestic product) performance will hit 7 percent again given outsized gains in infrastructure spending, capital goods imports, and manufacturing,” analysts said in their joint report, “The Market Call”, released on Monday.

The Philippine economy surged 6.8 percent in the first quarter.

FMIC and UA&P expects that the government's infrastructure spending will continue to post double-digit growth over the remaining months of 2018.

The report said that manufacturing output expansion will also provide the basis for robust job creation and consumer spending.

It pointed out that the surge in manufacturing output suggests huge job gains that should support further spending and growth.

“Consumer sentiment for second quarter did go up and appeared stable towards third quarter,” it said, noting that consumer confidence may be eroded unless inflation slows down back to below 5 percent in July to September quarter.

FMIC and UA&P, however, are optimistic the inflation will start to slow down in the third quarter as rice imports have arrived and the September harvest is approaching, while the US Department of Energy sees crude oil prices sliding in the second half of the year.

The report further said exports, while still down in single-digits in April, “may finally move back to positive growth territory” in the light of the strong acceleration in the US economy starting second quarter. (PNA)