FASTER ECONOMIC GROWTH. The First Metro Investment Croporation and the University of Asia and the Pacific project the Philippine economy to grow at a faster pace in the second quarter. Philippine economic growth settled at 5.7 percent in the first quarter of the year. (PNA file photo)
MANILA – Philippine economic growth is expected to accelerate beginning in the second quarter of the year, driven by ramped up government spending, easing inflation, and high employment level.
In the May issue of The Market Call released on Wednesday, the First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P) said the Philippine economy is projected to grow by 5.9 percent in the second quarter of the year, faster than the 5.7 percent expansion in the first quarter of the year.
FMIC and UA&P expect this growth to continue for the rest of the year.
"We retain our nuanced optimism with respect to an acceleration that should start in Q2 (second quarter) continuing for the rest of 2024," the report said.
"We base this on hefty employment levels, fiscal space that should enable the government to speed up spending, especially infrastructures, inflation likely to peak at slightly below 4% in July and steadier at close to 3.0% starting August amid easing rice and crude oil prices, and a likely BSP (Bangko Sentral ng Pilipinas) policy rate cut by August," FMIC and UA&P added.
Latest data from the Philippine Statistics Authority showed that the country's employment rate settled at 96.1 percent in March this year.
FMIC and UA&P said the high employment levels likely heightened government spending.
Inflation, meanwhile, which is expected to peak in the second quarter, will help spur more domestic demand.
FMIC and UA&P said rice prices in May will also likely slide by -1.0 percent month-on-month, while crude oil should fall by 7.0 percent.
For this year, the FMIC and UA&P expects Philippine economic growth to hit 6.0 percent which is within the government's 6 to 7 percent economic growth target for this year. (PNA)
