PH Economy Seen To Grow 5%

The Philippine economy is seen to notch a full-year expansion of five percent with the positive 11.8-percent gross domestic product (GDP) in the second quarter of the year, according to a forecast from Market Call.

Photo Insert: Industrial park, Carmona, Cavite

A joint monthly publication of First Metro Investment Corporation (FMIC) and University of Asia and the Pacific (UA&P), Market Call said that the latest reports on exports, imports, manufacturing, and government spending, among others, also boost hopes for faster economic recovery in the second half of the year.

The positive full-year growth outlook “has brightened” following the release of the second-quarter GDP figure, which ended the five consecutive quarters of contraction.

But the report said quarter-on-quarter GDP data slipped by 1.4 percent from April to June this year while an economic hit is expected from recent lockdowns.

“These lead us to think that the low side of (or slightly below) our 5-6 (percent) FY (fiscal year) projection would land us in the safe zone,” it added.

The report further said manufacturing continues to rise in the third quarter, with the Purchasing Managers Index (PMI) at 50.4, lower than the 50.8 last June.

An index higher than 50 indicates expansion while an index below 50 shows otherwise. Exports remain on expansion although the July year-on-year figure slowed to 17.6 percent.

“However, we note that in terms of levels (of) exports (at USD6.5 billion), it greatly exceeds levels in January and February 2020, as well as those of June 2019,” the report said.

Government expenditures are boosted by those related to infrastructure projects, it added, and these are to be sustained ahead of the May 2022 national polls.

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