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MANILA - FMIC-UA&P Market Research Center on Thursday said it has raised its growth forecast for the Philippines this year to a range of 6-7 percent from the earlier estimate of 5.5 percent.
Victor Abola, UA&P senior economist, said the forecast upgrade stemmed from expectations of strong consumer spending given benign inflation, as well as higher construction spending by both the government and the private sector on account of preparations for the 2013 mid-term elections.
"With industrial electricity sales growth zooming to a 2-year high of 19.7 percent in May, and public spending up by 18.3 percent, and new jobs still over 1 million in April, the outlook for GDP hike in the second quarter looks even more promising than the first quarter," the report said.
FMIC-UA&P forecast second-quarter growth to pick up to a range of 6.5-7 percent from the first-quarter's 6.4 percent.
Driving growth in the April to June period are higher infrastructure spending, brisk manufacturing activity, higher consumption spending and stronger exports, the report said.
Abola said the services sector - particularly business process outsourcing and tourism industries - likely grew 15 percent in the second quarter.
"The upgraded outlook for 2012 second quarter GDP expansion is more remarkable given the slowdown of the U.S. economy and China, two main engines of world growth, and the lingering banking and debt crisis in the Euro-zone focused on elections in Greece, which held the world in tenterhooks. The outcome was fairly positive—No Grexit—followed by some concessions by Germany in favor of growth for beleaguered Spain and Italy, core countries in the Eurozone," FMIC-UA&P said.
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