Economy grew faster in second quarter, says Recto

MANILA, Philippines - The Philippine economy likely grew faster in the second quarter from a year earlier compared with the 0.4 percent growth posted in the first three months of the year, Socioeconomic Planning Secretary Ralph Recto said yesterday.

While he declined to give specific economic growth projections yet, Recto said that gross domestic product (GDP) expanded faster in the second quarter than in the first three months of the year because of an improvement in consumer spending and the government’s pump-priming efforts.

“GDP growth in the first quarter should be better than the first quarter,” Recto said. “Definitely, it is a positive growth.”

Recto echoed an earlier projection made by NEDA deputy director general Rolando Tungpalan who said that the economy grew faster in the second quarter due to accelerated government spending and an improvement in consumer spending during the period.

Recto and Tungpalan are confident that the Philippines will not slip into a recession as predicted by many analysts and research firms.

In the first quarter of the year, the economy grew by only 0.4 percent compared to the same period in 2008.

It shrank by a seasonally adjusted 2.3 percent from the last three months of 2008, its lowest level recorded for the past 20 years.

The 0.4 percent GDP growth was below the government’s first quarter growth projection of 1.8 percent to 2.8 percent and below the adjusted 3.9 percent GDP expansion recorded in the same period last year.

GDP, the measure of economic activity in a country, is the sum of all goods and services produced in a country in a given period of time.

The lower-than-expected GDP growth in the first quarter of the year has prompted the government to adjust its economic growth target for 2009 to a range of 0.8 percent to 1.8 percent from 3.1 percent to 4.1 percent.