The Philippine economy is expected to further accelerate in the second half of the year, buoyed by the rapid spending on infrastructure and the strong domestic demand.
“The continued improvement in exports, coupled with higher inflows from OFW (overseas Filipino workers) remittances, should moreover push further the country’s economic expansion,” said investment bank First Metro Investment Corp. and the University of Asia & the Pacific in the latest issue of The Market Call.
The country’s gross domestic product expanded 6.4 percent in January to June this year, making it still one of Asia’s fastest growing economies.
FMIC and UA&P noted that early data indicate further growth in the second half after the economy expanded 6.5 percent in the second quarter.
They cited national government spending, especially on infrastructures, which continued its double-digit growth pace in July 2017.
The report also noted the sharp 17.6-percent gain in Bureau of Internal Revenue (BIR) tax collections that “suggests better sales and profits in second quarter that should carry over into third quarter spending.”
It said exports should also maintain its double-digit growth pace as the United States economy has shown robustness in GDP growth in second quarter, and strong gains in job creation in June to August.
Union, Japan, China and India also “keep on surprising in the upside,” it added.
FMIC and UA&P further said manufacturing remains as a “bright spot” with its 8.1-percent expansion in June supported by 12 out of 20 subsectors posting two-figure gains.
“Continued fast growth in OFW remittances in peso terms will likely translate to stronger domestic demand,” they said.