The Philippine economy likely grew more than 7 percent in the first quarter, faster than the 6.3-percent expansion in the fourth quarter, bolstered by election-related spending ahead of the May 9 elections, economists said Thursday.
Economists from First Metro Investment Corp. and University of Asia & the Pacific said in joint report the stronger growth in the first three months of 2016 was possible despite a slowdown in agriculture output during the period.
“We foresee an above-7 percent Q1 GDP growth, even if agriculture were to decline by 5 percent [which is unlikely] in Q1,” the economists said in the April issue of Market Call report.
“This optimistic outlook not only hinges on the stellar performance in January but also on our expectations for the other sectors,” they said.
Robust election spending by both the government and the candidates should continue to actual elections in May. “This should boost employment, consumer and investment spending,” the economists said.
The government earlier said the gross domestic product was expected to grow between 6.8 and 7.8 percent this year, anchored mainly on robust domestic demand. Last year, the economy grew 5.8 percent, below the target range of 7 percent to 8 percent.
Metrobank Research said in a separate report the economy could grow 6.3 percent in 2016, as consumption spending would remain solid amid the soft commodity prices and the prevailing low-interest rate environment.
It said election spending was expected to support key services such as transportation, communication, and storage, business activities and retail trade.
However, Metrobank said the agricultural sector would remain weak as the El Niño dry spell was expected to extend until the first half.