The economy is seen to grow by 5.9 percent in the second quarter of the year, according to the latest issue of the Market Call.
“We have kept our cautious optimism despite the ‘disappointing’ gross domestic product (GDP) growth in Q1. Moving forward, we don’t see a repeat of Q1 downbeat,” the report published by First Metro Investment Corp. and the University of Asia and the Pacific Capital Markets Research said.
The Philippine economy grew by 5.7 percent in the first quarter of 2024, slower than the 6.4 percent expansion recorded in the same period a year ago.
The economy’s growth performance for the said three-month period also fell below the government’s full year growth assumption of six to seven percent.
“We project a mild acceleration in GDP growth to 5.9 percent in Q2, but pace will likely hasten in H2 to bring full year GDP growth to six percent with a slight upside bias,” it added.
For the rest of the year, elevated employment levels, expected ramping up of government spending and inflation maxing out at slightly below four percent up to July, dropping closer to three percent by August, and a likely policy rate cut of 25 basis points by the Bangko Sentral ng Pilipinas in the third quarter of the year should put domestic demand back into the fast lane, according to the report.
“Trade deficits will remain elevated, and the US dollar’s continuing strength should put upward pressure on the US dollar-Philippine peso rate, albeit at a more moderate pace compared to that seen in Q2,” it said.
