MANILA, Philippines - Despite the damage inflicted by a recent typhoon on the farm sector, economic growth in the last quarter of the year may settle at 6.5 percent on the back of more overseas Filipino worker (OFW) remittances and higher infrastructure spending in the public and private sectors.
In its periodic report, First Metro Investment Corp. and University of Asia and the Pacific’s Capital Markets Research also said that the strong performance of the country’s economy will spill over to 2013.
“Although faced by a higher base in the fourth quarter of 2011, this year’s Q4 should be at least as good as the average gross domestic product [GDP] growth of 6.5 percent in the first, second and third quarters of the year,” according to Capital Markets Research’s period report titled “Market Call.”
The report noted that the first month of electricity sales in the fourth quarter had a 7.8-percent increase, indicating “another streak of strong gains in the last quarter of the year.”
Growth for the October-to-December period is also being boosted by infrastructure spending in view of the May elections next year.
For the rest of 2012, Market Call forecast GDP growth to settle at slightly below 7 percent.
The report also noted that the country’s economy has been “impervious” to the gloomy world economic outlook and that the Philippines will continue to perform well next year. “We expect to see a further acceleration in the growth pace in 2013.”
The country’s economy grew by 7.1 percent in July to September on the back of the robust expansion in consumer spending and public and private construction.
The export sector has also exhibited resiliency in the face of the slowdown in the economies of the country’s major markets such as the European Union and the United States.
“As of September 2012, the year-to-date annual growth of exports improved to 7.4 percent, elevating positive sentiment for exports performance despite the undesirable debt crisis in Europe and the negative impact of the fiscal cliff in the United States,” the report read.
Despite the strong performance of the sector in September, the report noted export growth will only be above 6 percent and will not meet the 10-percent growth rate targeted by the government and exporters at the start of the year.