The economy is estimated to post a 6.1 percent growth in the first quarter of the year, according to the latest issue of the Market Call.
The latest report attributed the expansion in the first quarter to infrastructure spending which goes into high gear as national government, buoyed by official development assistance funding, and public-private partnership (PPP) projects gain traction.
The growth estimate, however, is slower than the 6.4 percent expansion recorded in the same period a year ago.
“We expect national government to have a strong start in 2024 after the understandable tentativeness of the different departments at the start of 2023 when the then new administration had just been in an organizational mode. Infrastructure spending, both government funded and PPP projects, should accelerate in 2024 as national government bids out and awards large undertakings,” the report said.
The report further said the surprise vault of February inflation to 3.4 percent from 2.8 percent a month earlier may have soured investor appetite a little, but the economy looks sufficiently robust to continue its trajectory.
“While seasonally adjusted January month-on-month inflation surged by 0.9 percent due largely to food and fuel price increases, we do not expect similar movements in the coming months. Thai rice export prices appear to trend slightly downward in February, while crude oil prices have consistently failed to break through strong resistance levels,” the report said.
“We may see year-on-year inflation reach 3.7 percent in the first half, but it should return to under 3.5 percent by the third quarter,” it added.
Meanwhile, at the sidelines of the Economic Journalists’ Association of the Philippines induction ceremony last week, Finance Secretary Ralph Recto sees a possible pause at the Monetary Board’s next meeting.
“I don’t expect interest rates to go up or go down next week. I might be wrong, but I don’t expect,” Recto said.
Recto also said two rate cuts could be a possibility this year for a total of 50 basis points.
