MANILA, Philippines - The Philippine economy is seen to surpass 7% growth in the third quarter, according to First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P).
"We remain on track with our outlook of another above-7 percent GDP growth for third quarter," they said in the September issue of Market Call.
"The Q3 was... off to a fast start, as the National Government resumed the dizzying pace of infrastructure spending, which rose by 45.1% in July. The economy’s health may also be reflected by the 18.5% increase in tax revenues for the same month," they added.
In the second quarter, the Philippine economy grew by 7.5%, the fastest in Southeast Asia and at par with China's growth.
Third quarter GDP data will be released in November.
FMIC and UA&P noted the Philippine economy may surpass the 6-7% full-year target, due to the government's sustained increase in infrastructure spending and manageable inflation.
:Continuing low interest environment--especially with the outward movement of SDA (Special Deposit Accounts) funds from the BSP-- and better exports prospects provide additional support to this view," they said.
Despite higher crude oil prices, FMIC and UA&P said "mild increases in non-food prices and better harvests starting October should keep inflation very much in check in the second half."
"The slow but sure recovery in the US economy and China’s avoidance of a 'hard landing' should ensure that external demand will not be a big drag on growth in H2, as it had in H1," they said.
Continued remittances from overseas Filipinos, as well as the peso depreciation, will help support domestic consumption in the second half, FMIC and UA&P said.