GDP growth to reach 7% in Q2

Image Representation from Novinite.com Analysts from the University of Asian and the Pacific (UA&P) and First Metro Investment Corp. (FMIC) forecasted the country’s economy to accelerate at least seven percent in the second quarter of the year buoyed by the surge in infrastructure spending, tax collections, and manufacturing output.

“The six consecutive months of above 20 percent growth in infrastructure spending and major PPP (public-private partnership) projects gaining momentum show that the national government’s Build-Build-Build program is gaining traction,” they said in the latest issue of The Market Call Capital Markets Research.

The report said the construction sector would likely lead investment spending this quarter.

It said the surge in infrastructure spending, together with strength in manufacturing, should overcome any weakness in exports in April to June quarter and beyond.

FMIC and UA&P expected an export turnaround to positive territory before the end of the second quarter with the significantly faster growth expected in the United States beginning this quarter, as well as the expected recoveries of the European Union, Japan and China.

The report further said that remittances from Overseas Filipino Workers (OFW) should take a positive turn this month, as the issue on the unilateral ban on deployments to Kuwait has been resolved.

The increase in inflows of foreign direct investments (FDI) is also expected to boost gross domestic product (GDP) growth starting second quarter, it added.

The Philippine economy grew by 6.8 percent in the first quarter. PNA