MANILA -- While the country’s first-quarter performance has proven ''disappointing'' and ''below expectations,'' the full-year outlook where local output could range from 6.5 percent to 7.5 percent is still within reach, provided further domestic reforms are pursued, according to a leading economist for Asia Pacific and some business organizations.
“The average for the [p]ast quarters has been at least 6-percent growth. We got spoiled with 7.2-percent growth. The consensus estimate is about 6.5 percent to 6.4 percent. So when you got 5.7 percent when everybody expect[ed] 6.5 percent, of course, it’s a bit of a disappointment.” Ramon del Rosario Jr., chairman of the Makati Business Club, said.
The performance places the Philippines just behind China and Malaysia, he quickly added.
The chief economist of IHS Global in Asia-Pacific, Rajiv Biswas, shared this view, saying the first-quarter GDP performance of the Philippines proved “somewhat below market expectations” and that for the first time growth dipped below 6 percent in nine quarters.
Biswas said the residual economic impact of natural disasters that hit the Philippines during the last quarter of 2013, particularly Supertyphoon Yolanda, was a key debilitating factor.
He added the slowdown in private construction, which dipped 6 percent during the period, also contributed to the temperate first-quarter growth.
However, despite the underwhelming first-quarter growth, business leaders remain upbeat that the economy’s traditional growth drivers and the pursuit of more domestic reforms could still fuel continued economic progress down the line.
The economist said the outlook for the Philippines economy for the rest of the year until 2015 remains strong as private consumption and robust household spending proved robust in the first quarter of the year. Biswas similarly highlighted the spike in public construction, which rose 22 percent during the period, due to the pursuit of major public-infrastructure programs that are even now undertaken.
“Public-sector spending on post-disaster reconstruction work will also boost GDP growth over the next 18 months,” Biswas said in a commentary made available to news organizations.
Del Rosario backed Biswas’s sentiment, pointing out that the continuing post-Yolanda reconstruction effort should mean more vigorous growth in the future. He also said efforts should be taken to speed up the projects undertaken by the government.
Peter Angelo Perfecto, president of the influential Makati Business Club, said the country’s recent hosting of the World Economic Forum on East Asia and the anticipated trade missions that the event was thought to have encouraged, would only serve to boost the growth outlook.
Alfredo Yao, president of the Philippine Chamber of Commerce and Industry, however, took a more prudent stance, saying the first quarter is traditionally a slow quarter and that the second-quarter performance could be affected by the prevailing truck ban.
“The problem is the truck ban—this has a huge impact on GDP in the second quarter. It could be lower than 5.7 percent because majority of the volume of cargoes affected and industries are in Metro Manila. Hopefully, we can solve the truck-ban issue so that third-quarter growth won’t be affected,” Yao said.