FMIC, UA&P expect economic growth to pick up this semester

ECONOMIC GROWTH will likely pick up this semester as exports have so far maintained a double-digit pace of increase and as government starts more infrastructure projects, analysts at First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in their latest joint report.

“While the economy’s growth pace improved to 6.5% in Q2, early data suggest further improvements in the second half,” read the September issue of The Market Call that was e-mailed to journalists yesterday.

“National government spending, especially on infrastructure, continued its double-digit growth pace in July… while the sharp 17.6% gain in BIR (Bureau of Internal Revenue) tax collections for the same suggests better sales and profits in Q2 that should carry over into Q3 spending.”

Philippine gross domestic product expanded faster in the second quarter than the 6.4% climb in January-March, leading to a 6.45% average for last semester that approaches the government’s 6.5-7.5% full-year growth goal for 2017.

State infrastructure spending and other capital outlays grew by 25% to P48.4 billion in July from the P38.7 billion recorded in the same month last year, even as it was 6.7% smaller than June’s P51.9 billion.

The Philippine Statistics Authority will report third-quarter growth data on Nov. 16.

“We believe that the rapid spending on infrastructure and the strong domestic demand will continue to buoy the economy. The continued improvement in exports, coupled with higher inflows from OFW (overseas Filipino worker) remittances, should moreover push further the country’s economic expansion,” The Market Call read. “External trade is also expected to remain upbeat for the rest of the year, with exports of goods seen to keep growing in double digits amid stronger demand from offshore markets, particularly the United States, with improving growth prospects driving consumption.” —