First Metro Investment Corporation (FMIC) slightly upgraded its economic growth forecast for the first quarter to 6.2 percent from 6.1 percent due to stronger labor market and sustained government spending on infrastructure projects.

“The Philippine economy’s resilience once again showed up as more positive economic data for February emerged,” FMIC said in its report released Friday.

Employment rate improved to 96.5 percent in February from 95.5 percent in January, while the jobless rate dropped to 3.5 percent from 4.5 percent during the period, according to the Philippine Statistics Authority.

Accordingly, the manufacturing industry remained in the expansionary level or above the 50-mark in the S&P Manufacturing PMI.

Specifically, its level slightly fell to 50.9 points in March from 51 in February.

“Nevertheless, this figure marked the seventh consecutive month of expansion of the country’s manufacturing sector,” FMIC stressed.

The top manufactured products were wood, chemicals, Coke, and petroleum, the FMIC shared.

Meanwhile, slower production was seen in machinery and equipment, non-metals, leather goods and shoes.

Apart from more workers, FMIC expects government spending coupled with cheaper debt payments to drive economic growth.

FMIC shared that the national government increased spending on capital goods by 6.9 percent year-on-year.

“While interest payments took an elevated path, those will not recur since the country obtained foreign loans in January-February, to take advantage of low interest rates, and therefore, mature in the same months,” the investment analyst said.

FMIC sees continued spending on projects backed by the official development assistance program and public-private partnerships,  such as MRT-7, LRT-1 and NLEX-SLEX Elevated Connector Road.

Bank financing grows

Amid a bigger pool of income earners, the Bangko Sentral ng Pilipinas reported consumer loans surged by 25.2 percent in February from January last year.

Lending for production activities also grew by 6.8 percent, FMIC, which is part of the Metrobank group, it added.

“Additionally, we also see the strong first-quarter organic loan growth of BDO Unibank at 13 percent year-on-year and Bank of the Philippine Islands at 11.9 percent, providing support for the robust GDP growth,” FMIC said.

FMIC said these results are encouraging as consumption among households and businesses remained robust despite a higher inflation rate of 3.7 percent in March, coming from 3.4 percent in February and 2.8 percent in January.