MANILA — The growth in the country’s gross domestic product (GDP) for the first quarter of the year was strong and balanced, the research unit of Australia and New Zealand (ANZ) Banking Group Ltd. said Wednesday.
ANZ Research’s statement came after the National Economic Development Authority (NEDA) announced that the country’s GDP in Q1 2017 rose 6.4 percent from the same period last year. However, the result missed the assumptions of 7 percent level.
“The Philippines’ Q1 GDP growth remained strong even as it missed expectations. Household spending eased on high base effects from an election-boosted growth in 2016. Even with the moderation, domestic demand remained robust,” ANZ Research said.
“The trade deficit narrowed on strong export growth, easing some of the risks surrounding the fall in the current account surplus,” it added.
ANZ Research noted that even with the easing of household consumption, total investment posted a robust growth of 11.8 percent year-on-year.
Moreover, IHS Markit Asia Pacific Chief Economist Rajiv Biswas also highlighted the 6.8 percent growth in services sector, industrial sector at 6.1 percent, and agriculture at 4.9 percent.
“Despite some moderation in the pace of growth, the Philippines economy has continued to show strong GDP growth momentum in Q1 2017, with the near-term growth outlook remaining positive,” said Biswas.
“Manufacturing production measured both in value and volume terms rose strongly in March, continuing to reflect buoyant manufacturing output growth,” the economist added.
Biswas projected that the Philippines will register a GDP growth of 6.4 percent at end-2017, marking the country’s six consecutive years of strong economic expansion.
“While the Philippine government will gradually ramp up infrastructure spending, the process of boosting infrastructure development is often protracted due to long lead times for planning and implementing major new infrastructure projects,” Biswas said in a separate e-mail to the Philippine News Agency.
“Nevertheless, the Philippine economy looks set for the sixth successive year of strong economic growth with the key sectors of the economy expected to continue to record robust expansion,” he added.
ANZ Research’s growth outlook for the country for the full year of 2017 is more optimistic at 6.9 percent.
Meanwhile, the ANZ Research noted that with the country’s robust economic growth and rising inflation, it calls for the tightening of central bank’s policy stance by third quarter of the year.
“In our view, the recent appointment of a central bank insider in Deputy Governor Nestor Espenilla as its next central bank chief will likely keep the focus on inflation targeting. We still expect cumulative tightening of 50 basis points in 2017, followed by a further 75 basis points of hikes in 2018,” it stated. Kris M. Crismundo/PNA