Recto sees at least 5.8 percent GDP growth in Q1

MANILA, Philippines — The Philippine economy may have expanded by at least 5.8 percent to as much as 6.3 percent in the first quarter as inflation remained a concern for the government.

Finance Secretary Ralph Recto said gross domestic product (GDP) likely expanded by 5.8 to 6.3 percent from January to March.

If realized, this would be slower than 6.4 percent growth recorded in the first quarter.

“Anything higher than 5.5 percent is a win so if we grew by 5.8 percent, that’s good enough, that should be one of the highest in the region,” Recto told reporters late Monday afternoon.

“I’m being realistic, I think it would be nearer at 5.8 percent but it can breach six percent. If we get lucky, we can even hit 6.3 percent,” he said.

Recently, the economic team has turned less optimistic on growth prospects amid global trade disruptions and geopolitical tensions.

The Cabinet-level Development Budget Coordination Committee (DBCC) already downgraded GDP expectations to a range of six to seven percent from the previous goal of 6.5 to 7.5 percent.

“There’s nothing I can do already about the first quarter so we just focus on how to improve it in the second, third, and fourth quarter moving forward,” Recto said.

“We’re also starting from a high base. So if we can achieve 5.8 percent, that’s already a good one especially from a high of 6.4 percent last year,” he said.

Further, the finance chief emphasized that inflation is still the biggest worry, noting that GDP growth can be higher moving forward if inflation is tamed.

Inflation accelerated for the second straight month to 3.7 percent in March, bringing the average rate to 3.3 percent.

For April, the Bangko Sentral ng Pilipinas is expecting that the headline rate could breach the target of four percent and hit as much as 4.3 percent on more expensive rice and meat, as well as due to the depreciation of the peso against the dollar.

“We expect that there will be a breach, maybe in the second or third quarter. But for the whole year, it will still be within the target range,” Recto said.