By Leslie D. Venzon
MANILA, May 26 (PNA) — The Philippine economy is expected to grow 6.5 percent to 7 percent in the first quarter due to higher infrastructure spending and good agricultural performance.
A joint report by the First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) believes that infrastructure spending had been quite robust given the gains in cement manufacturing in the first two months of 2015.
The report cited the recovery in Meralco electricity sales in March and continued low inflation rates.
“(These) should provide a good basis for GDP to rise between 6.5 percent to 7 percent in first quarter, or just about at the same pace as in the previous quarter,” it added.
The latest issue of the Market Call said consumption spending would also likely improve from last fourth quarter, as the fall in inflation rates is likely to continue for the rest of first half of 2015.
“This should convince consumers that the gains in purchasing power are relatively permanent and thus encourage them to hike spending in first half,” it said.
FMIC and UA&P said the weak exports in first quarter reflect the slowdown in United States growth due to harsh winter.
“However, we think both will stage a strong rebound in second quarter and continue to improve for the rest of the year,” the report added.
The January to March GDP data is slated for release on Thursday. (PNA)