By Leslie D. Venzon
MANILA, Sept. 24 (PNA) — Expanding government spending and slightly higher exports will enable the Philippine economy to expand at 6.2 percent in 2015 and remain as a top performer in Asean and East Asia.
“The Philippine economy remains a bright spot relative to its ASEAN neighbors and we expect economic growth to be sequentially better in the next four quarters due to election boost,” said a joint report by the First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P).
The report noted that fiscal expenditure finally took off in July with its 25 percent growth, with infrastructure spending leading the way.
It also expects exports’ softness will reverse in the second half as United States and Eurozone growth pulls up demand for Philippine products, albeit at a single-digit pace.
“With government spending getting into high gear, especially as the May 2016 elections come closer, and a little nudge from exports, we see the economy topping Asean and East Asian countries’ growth, except China’s, with a projected full year GDP growth of 6.2 percent,” said the latest issue of the Market Call.
The country’s gross domestic product (GDP) expanded by 5.6 percent in April to June partly on the rebound in infrastructure spending, bringing the first-half figure at 5.3 percent.
The report also cited the increasing pace of Meralco electricity sales as industry begins to recover and consumers have began spending once again. This will only accelerate as the pre-election season heats up.
It also sees inflation continue decelerating in the third quarter, but food prices may slightly increase in the fourth quarter as El Nino hits agricultural output.
However, the impact will be softened as the government has raised its rice import requirements by 750,000 metric tons. (PNA)