Economy likely grew at faster pace in Q1

MANILA, Philippines, May 11 ------ The Philippine economy likely expanded at a faster pace in the first quarter than the previous three-month period, supported by both consumer and government spending, according to economists. 

Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email that he expects the economy to have expanded by 6.2 percent in the first quarter. The forecast is faster than the 5.3 percent gross domestic product (GDP) growth in the fourth quarter of 2024. Ricafort said increased higher infrastructure spending and election-related spending likely supported economic growth in the first quarter. 

For Reyes Tacandong & Co. senior adviser Jonathan Ravelas, the economy likely posted a six percent growth in the first quarter. Following the 75 basis points worth of rate cuts delivered by the Bangko Sentral ng Pilipinas last year, he said declining inflation should help improve consumption. In addition, he said election spending is expected to support growth. 

Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco said he sees the GDP growth in the first quarter at 5.8 percent, citing broad-based improvement in activity. “The main heroes, though, relative to Q4 (fourth quarter), likely will be private consumption, government spending and exports,” he said. 

Oikonomia Advisory and Research Inc. junior economist Rafael Alfonso Remo said he expects the economy to have posted 5.7 percent growth in the first quarter. While the economy is driven by consumption and services, he said complications due to recent trade policies including the United States tariffs, may make it difficult for the country to meet its six to eight percent growth target for the year. “However, with proper fiscal actions, boosting of public spending, and strengthening of international relations with other trade partner countries, it is still possible to meet the target line,” he said. 

Ateneo Center for Economic Research and Development director Ser Percival Peña-Reyes said their economic growth forecast for the first quarter is at 5.4 percent. “Drivers are transport and storage, accommodation and food service activities and construction,” he said. For University of Santo Tomas Graduate School professorial lecturer Emmanuel Lopez, the GDP estimate for the first quarter is at five to 5.5 percent due to weaker global demand, trade-related headwinds, as well as financial tightening effects. “However, we should expect the economy to grow by 6.1 percent to 6.5 percent in 2025, supported by more accommodative financial conditions,” he said. 

The Philippine Statistics Authority is set to release data on the country’s first quarter economic performance on May 8. 

Source: philstar.com