GDP most likely to have strengthened in Q1 — economists

The Philippine economy is likely to have expanded faster in the first three months of 2018 than the same period last year, local economists revealed.

Most economists now expect the first quarter local gross domestic product (GDP) to have grown by more than the 6.4-percent expansion recorded in the same period last year.

The Philippine Statistics Authority (PSA) is scheduled to release the first-quarter economic growth about 10 a.m. on Thursday, May 10.

"My forecast is 6.7 to 7 percent. The drivers are government spending, private investments, manufacturing, and service sector," Cid Terosa, dean of the School of Economics of the University of Asia and the Pacific (UA&P), said in a text message.

Data released by the Department of Budget and Management (BDM) indicate that the government spent a total of P313.1 billion in the first quarter, 30 percent higher year-on-year.

This comes as spending on infrastructure and other capital outlays rose by 32.4 percent to P63.4 billion during the period, on account of the government's massive infrastructure program.

Under the Build, Build, Build program, the government plans to spend over P8 trillion until 2022, largely funded by government revenues from taxes.

This year alone, the Philippines plans to roll out 76 big-ticket projects cumulatively valued at $35.5 billion or P1.1 trillion.

For First Metro Investments Corp. (FMIC), the economy could have expanded by more than 7 percent, also on a combination of higher employment, foreign investments, and manufacturing output.

"The signs are all pointing to gross domestic product expansion of above-7 percent in Q1 2018," it said in the March 2018 edition of "The Market Call."

Independent economic consultant John Paolo Rivera, however, had a different view on the economic growth.

"In my assessment of recent socioeconomic activities in the Philippines, Q1 GDP growth can be estimated within 5 to 6 percent (despite initial estimates pegged at 7 percent)," he said in a separate text message.

"Slowdown can be attributed to the increase in unemployment/underemployment, inflation (reducing private consumption switching to inferior goods from normal goods due to higher prices brought by TRAIN)," he explained.

The Philippines opened the year with an employment rate of 94.7 percent, but the underemployment rate grew to 18.0 percent from 16.3 percent previously.

Meanwhile, inflation continued to accelerate to the fastest pace in over three years in January, February, and March.

"I just hope the effects of Build, Build, Build is stronger than the other inhibiting factors of TRAIN, inflation, unemployment, on the aggregate economy," Rivera said. — BAP, GMA News