Economy likely rose over 6% in 1st quarter

THE Philippines will continue to be the bright spot in Asia as the economy likely expanded by 6.2 percent in the first quarter, significantly faster than 5 percent a year ago on domestic demand and investments, Moody’s Analytics, a division of Moody’s Corp., said over the weekend.

“The Philippine economy is expected to have expanded 6.2 percent year-on-year in the opening quarter of 2016, largely unchanged from the 6.3-percent result posted in the fourth quarter of 2015,” Moody’s said in a report.

Moody’s said the performance would make the Philippines the best-performing economy in Southeast Asia. It said unlike its regional counterparts, the Philippine economy has overcome the negative effects from slowing global demand.

“Although the archipelago’s exports have been falling, private consumption and investment activity are expected to remain strong,” it said.

The government is scheduled to release the first-quarter GDP data this week.

Economists polled by the Standard, meanwhile, said the gross domestic product rate in the first quarter of 2016 likely grew 6.6 percent on the average due to robust domestic consumption due to election-related spending.

Analysts said economic growth in the January-to-March period would range from 6.1 percent to 7.6 percent, up from 5 percent a year ago.

Metrobank research analyst Pauline Revillas said the GDP likely grew 6.1 percent amid solid consumption spending.

“We expect first quarter GDP to come in at 6.1 percent amid still solid consumption spending, sustained pick-up in election and investment spending,” Revillas said in an e-mail.

Ateneo de Manila University economics professor Alvin Ang said economic growth would likely range from 6.1 percent to 6.3 percent, down from the previous forecast of 6.4 percent following a 4.5-percent drop in agriculture production in the first quarter.

Standard Chartered economist Jeff Ng projected a higher growth performance of 6.2 percent.

“The second-round effects of government spending may also have boosted investment and household consumption,” Ng said in an e-mail.

He said while the country’s net trade remained a drag to the economy, services exports, domestic growth and room for fiscal support would cushion the negative impact.

“Household consumption will likely be supported by solid labour-market fundamentals and elections-related spending,” he added.

Source: The Standarrrd