DBS Bank sees 6% growth for Phl in Q2

MANILA, Philippines -  Philippine economic growth may stay above six percent in the second quarter, according to DBS Bank Ltd. of Singapore and Moody’s Analytics.

Gundy Cahyadi, economist at DBS, said the country’s gross domestic product (GDP) likely grew 6.2 percent in the second quarter.

This is compared with the 6.4 percent GDP growth in the first quarter, which was pulled down by weak private consumption, and the 6.6 percent expansion in the fourth quarter of last year.

However, economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) retained the GDP growth target at 6.5 percent to 7.5 percent this year.

Cahyadi said government spending has accelerated to more than 13 percent in the second quarter from four percent in the first quarter.

“This is likely to be supportive of overall GDP growth. What is more interesting, however, is to see how investment growth fared in the period,” he added.

For the full year, DBS sees the country’s GDP expansion slowing down to 6.4 percent after accelerating to 6.9 percent last year from 5.9 percent in 2015.

“While we continue to see double-digit growth in investments, the moderation in numbers is likely to have continued, partly due to the high base effects,” Cahyadi said.

On the other hand, Moody’s Analytics sees the Philippine economy growing faster in the second quarter due to higher electronics exports.

The unit of Moody’s Corp. said the country’s GDP expansion likely accelerated to 6.8 percent in the second quarter.

“The main boost will come from exports, which have been expanding rapidly in recent months largely because of stronger shipments of electronics,” it said.

Exports inched up 0.8 percent to $4.91 billion in June from $4.87 billion in the same month last year, according to the Philippine Statistics Authority (PSA).

Statistics showed shipment of electronic products from the Philippines went up 4.4 percent to $2.61 billion in June from $2.51 billion in the same month last year.

Moody’s Analytics pointed out domestic factors have remained conducive to strong growth.

“Private consumption will grow rapidly for the foreseeable future thanks to rising incomes and favorable demographics. Investment will also expand rapidly as a result of a mixture of private and government projects,” it added.

Socioeconomic Planning Secretary Ernesto Pernia earlier said a GDP expansion higher than seven percent was still possible for the second quarter of the year due to “increase in government spending and infrastructure spending.