The Philippine economy likely expanded 6.8 percent in the first quarter, faster than the actual expansion of 6.4 percent a year ago, on robust consumer spending and investments, Moody’s Analytics, a division of Moody’s Corp., said in a report over the weekend.
“The Philippine economy likely grew 6.8 percent year-on-year in the first quarter, after a 6.6-percent lift in the December quarter. The economy is in somewhat of a sweet spot,” Moody’s said.
“Consumer spending is rising at a healthy pace, thanks to steady inflows of overseas worker remittances and a firm labor market. Investment has been robust and is likely to remain strong as the government boosts infrastructure development,” Moody’s said.
Moody’s said the upswing in external demand was lifting exports. “With these factors and favorable demographics, the Philippines is likely to remain one of the fastest-growing economies in the region in coming years,” it said.
Private economists from First Metro Investment Corp. and University of Asia & the Pacific said in an earlier joint report the economy could grow faster than 7 percent in the first quarter, driven by the government’s higher spending on infrastructure in tandem with the robust manufacturing sector.
Citing latest available data, the economists said that for the first month of 2018 alone, the economy added 2.4 million jobs, the highest in a non-election year, with the industry sector―construction and
manufacturing contributing the biggest boost―clearly making a headway.
Manufacturing also surged 21.9 percent in January, providing support to the robust job numbers.
Government spending surged 37 percent year-on-year in February, on the back of higher spending on public infrastructure and social services programs, according to the Budget Department.
“Spending data for the first two months of the year bode well for our fiscal and economic growth targets,” said Budget Secretary Benjamin Diokno.
“With a strong boost from government spending, we expect first-quarter economic growth to approach the government’s full-year target of 7 percent to 8 percent,” Diokno said.
The International Monetary Fund last week kept its growth forecasts for the Philippines at 6.7 percent in 2018 and 6.8 percent in 2019, saying the economy would sustain its momentum backed by solid domestic demand and robust investments.
The IMF’s forecast showed the Philippines would continue outperforming most of its peers in the region including economic powerhouse China which was expected to expand 6.6 percent.
The IMF’s forecast for the Philippines is higher than 5.3 percent for Indonesia, 3.9 percent for Thailand, 5.3 percent for Malaysia, and 6.6 percent for Vietnam.
“As you may know, these growth forecasts are among the highest in the Asia-Pacific region. We believe that the Philippine economy will continue to grow strongly, driven by solid domestic demand and public investment,” IMF resident representative to the Philippines Yongzheng Yang said in a statement after the IMF released its World Economic Outlook.