MANILA—The Philippine economy likely expanded 7 percent or higher in the first quarter of the year on the back of agriculture’s rebound and double-digit growth in exports.
A joint report by the First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said the agriculture and exports should continue to improve as good weather and the United States (US) and global economies’ upswing gain traction.
Department of Finance (DOF) Undersecretary Gil Beltran said on the sidelines of the Treasury bonds auction Tuesday that a 7.0 percent GDP growth for Q1 2017 was a conservative forecast.
Beltran said that with the recovery of agriculture sector and the double-digit growth of industries, the economy is likely to expand by more than 7.0 percent.
Agriculture sector rose 5.28 percent in January to March period after several quarters of declines, with all subsectors recording increments led by crops subsector.
Manufacturing output for the same period likewise expanded at 11.1 percent rate, as eight of major sectors registered double-digit growth.
FMIC-UA&P report said the robust performance of these sectors should have provided an added stimulus to the fast-growing domestic demand.
“Domestic demand remains a bulwark, driven by elevated capital goods import growth, stronger public and private (especially PPPs) construction spending, and robust consumer expenditures, all contributing to a further first-quarter GDP (gross domestic product) gain of 7 percent or higher,” it said.
The FMIC and UA&P believed that economic growth momentum will be sustained during the remaining quarters of the year depending on the rollout of public-private partnership (PPP) projects and tax reforms.
“The further acceleration and sustainability of economic growth in second half would rely a lot on the speed at which big ticket PPP projects get rolled out full blast and on tax reforms peddled by the administration as the basis for more inclusive growth and heightened infrastructure spending,” the report added.
“We should be happy because not all countries in the world gets 7.0 percent growth,” he said.
The finance official noted that the government is putting fundamentals, such as ensuring that fiscal deficit and inflation rate are within the target level, in order to sustain the country’s strong economic growth.
“If you’ll maintain those fundamentals, you’ll never go wrong,” added Beltran.
The country’s GDP grew by 6.8 percent in 2016.
The Philippine Statistics Authority (PSA) is scheduled to release the first-quarter GDP results on May 18.