PH economy seen to grow above 6 pct in Q1


Posted at May 23 2014 03:27 PM | Updated as of May 23 2014 11:27 PM

MANILA, Philippines - The Philippine economy is seen to have grown above six percent in the first quarter.

Moody's Analytics forecast the Philippines' gross domestic product grow by 6.7 percent in the January to March period, up from 6.5 percent in the fourth quarter of 2013.

"Data from the opening quarter of 2014 have been quite robust, on average. Industrial production has slowed, but both exports and imports accelerated... It is not clear what impact, if any, the November typhoon had on the economy, pur model suggests a modest acceleration in GDP growth from the fourth quarter," it said.

The central Philippines was hit by super typhoon "Yolanda" (Haiyan) last November, flattening towns and damaging infrastructure and agricultural crops.

The Philippine economy grew by 7.2 percent in 2013, the second fastest in the region.

On the other hand, Standard Chartered Bank expects the Philippines' first quarter growth at 6.5 percent.

In its report "Philippines: Promising prospects; food is a risk", Standard Chartered cited strong motor vehicle sales, as well as growing foreign direct investments.

"Motor-vehicle sales and FDI have moved in tandem with GDP growth in the past few years. We see further upside potential for infrastructure development. Infrastructure spending grew almost 50 percent year-on-year in the first two months of this year, mainly in the health and transport sectors," it said.

Standard Chartered also raised its GDP growth forecast to 7.1 percent from 6.7 percent, citing strong domestic growth and positive export growth.

At the same time, Singapore's DBS Bank said economic growth may have slowed down to 6.2 percent in the first quarter.

"Strong domestic demand, modest improvement in export growth should mean that another 6-7 percent year-on-year growth is almost a certainty this year... The economy is clearly in a sweet spot, especially with inflation still pretty manageable (although it is trending up)," DBS said.

"Looking further ahead, there is a need to continue building up productive capacity in the economy. This is also important to raise the income level in the economy, particularly since there is a huge amount of employment in the informal sectors," it added.

The government targets 6.5 to 7.5 percent economic growth this year.