The Philippine economy is expected to expand between 6.5 and 7 per cent in the first quarter or faster, the economic planning minister said on Thursday, putting the government on track to meet its full-year target.
The South East Asian economy is among the world’s fastest growing with GDP expanding by 6.8 per cent in 2016, a three-year high.
Robust consumption and increased infrastructure spending, which spurred last year’s growth, continued to fuel economic activity, said Ernesto Pernia.
They should also bolster the country’s defences against any economic fallout from Brexit, potential protectionist measures in the United States and divergent monetary policies around the world, Mr Pernia said.
“First quarter growth will be in the neighbourhood of 6.5 to 7 per cent, maybe even more,” he said.
The government has pledged to raise infrastructure spending to 5.2 per cent of GDP this year from the projected 5 per cent of GDP last year.
Pernia expects exports to perform better this year after declining 4.4 per cent in 2016, as the government anticipates increased demand from China and Russia.
The president Rodrigo Duterte has carried out a stunning U-turn in the Philippines’ foreign policy since assuming office last year, aggressively pursuing tighter business and defence ties with China and Russia and weaning the country off dependence on longtime ally the United States.
“China is ramping up its importation of [Philippine] products and Russia said it will increase its demand for agriculture products,” Pernia said.
China said on Wednesday it signed US$1.74 billion worth of contracts to import Philippine products, such as fruits and lumber, during the vice premier Wang Yang’s recent trip to Manila.
Mr Pernia said full-year growth could be in the “midpoint” of the government’s 6.5 to 7.5 per cent forecast range, bolstering expectations the central bank may raise rates for the first time this year in more than two years to temper rising inflation.
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