The Philippine economy is projected to ease to 5.6 percent in the second quarter, however a robust rebound is expected in the second half of the year.
According to the latest issue of the Market Call, the Philippines’ full year economic growth is seen to reach 6.1 percent.
“While we expect a slowdown in GDP (gross domestic product) growth in Q2 to 5.6 percent, it should still prove sufficiently strong to bring full year GDP up by 6.1 percent,” the report said.
“H2 should show a good rebound due to an acceleration in national government infrastructure spending and employment, cut in personal income tax and milder inflation that should, on year-on-year basis, hit BSP’s (Bangko Sentral ng Pilipinas) two to four percent target by Q4. These translate to more robust investment and consumer spending,” the report added.
The Market Call’s full year estimate is at the lower end of the government’s growth assumption for 2023 of six to seven percent.
In the first quarter of the year, the Philippine economy expanded by 6.4 percent, making the country one of the best-performing economies in the Asia-Pacific Region.
The Philippine Statistics Authority is set to announce the economy’s second quarter performance later this week.
“With inflation rates clearly headed to its target range, we think BSP will pause in its next meeting in August, despite the widely expected Fed policy rate hike of 25 bps on July 25th,” the report said.
“However, the BSP stance, together with elevated trade deficits and an upside on the US dollar will likely push the exchange rate back to above P56/$ by yearend,” it added. – Angela Celis
