Local output—measured as the country’s gross domestic product (GDP)—may have accelerated in the second quarter, but likely at a pace slower than that reported in the second quarter last year, the Manila unit of the Dutch financial-services giant ING Group said.
ING Bank economist Joey Cuyegkeng said the pace of expansion might have accelerated by 6 percent in the April-to-June period this year.
Should the forecast prove spot on, the second-quarter expansion will prove an improvement from the lackluster 5.2 percent reported in the first quarter. But growth at 6 percent, however, should be weaker than local expansion, averaging 6.7 percent in the second quarter last year.
“The Philippine economy is not immune to the concerns of slower growth…the second-quarter growth should be better than the first quarter of 2015, but slower than the 6.7-percent, second-quarter 2014 growth,” Cuyegkeng said.
The anticipated moderating growth in the second quarter was traced to agricultural production having likely contracted because of a dry spell during the period.
This, however, may have been offset by such positive development, as the acceleration of infrastructure spending during the quarter.
The slowdown in agriculture output was not expected to stoke inflationary fires over the near term.
“Inflation is low, while risks are on the upside, with a more intense El Niño episode in the fourth quarter of 2015 and first quarter of 2016 implying steady monetary-policy settings for now,” Cuyegkeng said.
The economist also said the decelerating economy has affected the sentiment of foreign-currency traders, and, as a consequence, the value of the peso has become range-bound relative to the US dollar.
The peso on Tuesday closed just 5 centavos higher to 45.61 per dollar, from the 45.66 the previous day.
The total traded volume for the day was at $683.4 billion.
The Philippine Statistics Authority is set to release the second-quarter GDP data at the end of this month.