MANILA, Philippines - Moody’s Analytics Inc., a unit of New York-based Moody’s Investor Service, sees the country’s gross domestic product (GDP) growth accelerating to 4.8 percent in the first quarter of the year.
In its “Asia Pacific Review,” Moody’s Analytics said the GDP growth of the Philippines in the first quarter likely grew faster than the 3.7 percent booked in the fourth quarter last year on the back of higher government spending.
Moody’s Analytics said higher government spending helped lift growth from January to March this year as exports remain soft amid weak global demand.
“GDP in the Philippines likely grew 4.8 percent in the first quarter, after 3.7 percent in the fourth, increased government spending drove the acceleration, boosting domestic demand amid still-weak exports,” Moody’s Analytics said.
It pointed out that the government has stepped up infrastructure spending to encourage foreign investment and boost business-process outsourcing.
Higher government spending, Moody’s Analytics said, would help offset the slowdown in private consumption as the growth in the amount of remittances sent home by overseas Filipino workers (OFWs) continued to ease this year.
“Private consumption lost some steam as remittances from Filipino working abroad eased. Remittances, a key driver of private consumption, account for 10 percent of GDP,” it added.
Earlier, President Aquino said the country’s domestic output as measured by the GDP expanded by 5.2 percent in the first quarter of the year on the back of higher government spending.
However, former budget secretary and economist Benjamin Diokno believes that the country’s GDP grew 3.9 percent in the first quarter as government spending remained low and slower growth OFW remittances.
State spending improved in the first quarter of the year but remains below program. The government disbursed P296.397 billion in the first quarter, higher than the P258.555 billion disbursed a year ago but still below the program of P440.588 billion for the period.
On the other hand, OFW remittances climbed 5.4 percent to $4.842 billion in the first quarter of the year from $4.594 billion in the same period last year. The Bangko Sentral ng Pilipinas (BSP) is looking at a slower growth of five percent for remittances this year.
OFW remittances went up by 7.2 percent to a new record high of $20.117 billion last year from $18.763 billion in 2010 exceeding the revised growth target of seven percent.
The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP growth accelerating to five percent to six percent this year after slackening to 3.7 percent last year from 7.6 percent in 2010 due to weak global trade and cautious spending by the Aquino government.