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By Melissa Luz T. Lopez, Reporter

PHL seen as best performing SE Asian economy in Q1

Posted on May 14, 2016

THE Philippine economy is slated to become the best performer in the region to defy the trend of paling global growth during the first quarter, according to two forecasts issued on Friday.

Both Moody’s Analytics and ANZ Research remained upbeat on the prospects of the Philippine economy as 2016 opened, citing robust domestic activity and election-related spending as key growth drivers.

“The Philippines economy is expected to have expanded 6.2% year-on-year in the opening quarter of 2016, largely unchanged from the 6.3% result posted in the fourth quarter of 2015,” Moody’s Analytics said in a data preview.

“This will leave the Philippines with the best-performing economy in Southeast Asia.”

If realized, the growth estimate would surge from the 5% growth in gross domestic product (GDP) clocked in during the comparable year-ago period.

The government is set to report official first-quarter data on May 19.

“Unlike its regional counterparts, the Philippine economy has overcome the negative effects from slowing global demand. Although the archipelago’s exports have been falling, private consumption and investment activity are expected to remain strong,” the unit of the debt watcher said.

In its April issue of the World Economic Outlook, the International Monetary Fund trimmed its forecast for global growth to 3.2% for 2016 amid external headwinds derived from a continued slump in oil prices and spillover effects of China’s economic slowdown. However, the multilateral lender kept its full-year growth estimates for the Philippines at 6% this year and 6.2% for 2017.

Other economists earlier gave growth forecasts for the quarter at the 6% level, sustaining the pace seen since the second half of 2015 given a pickup in government spending that added to buoyant household consumption and private investments.

Analysts at ANZ Research were far more bullish, having projected a 7.6% GDP expansion for the first three months of 2016.

“The Philippines is the regional outlier with a strong increase in growth expected from 6.3% year-on-year in Q4 last year to 7.6% year-on-year in Q1 this year, boosted by election-related spending and helped by base effects,” ANZ economist Eugenia Fabon Victorino said in a separate research note.

“If our above consensus forecast for Philippine GDP growth is correct, that would make it the fastest growing economy in EM Asia and allow outgoing President Aquino to leave with a bang.”

Ms. Victorino said spending ahead of the May 9 elections gave an extra boost to the economy alongside “robust” import growth, household spending, and factory output. Full-year growth is expected to clock in at 6.1%, she added, rising from last year’s 5.8% but still below the government’s 6.8-7.8% target.