‘Inflation to cut Q2 growth to 5.8%’

By Jasper Emmanuel Y. Arcalas @jearcalas

THE “elevated” prices of goods and services will dent the country’s economic performance in the second quarter, slowing it down further to 5.8 percent, the lowest in nine quarters, a local think tank said.

The First Metro Investment Corporation-University of Asia and the Pacific (FMIC-UA&P) Capital Market Research projected that the Philippines’s second quarter economic performance would be slower than the 6.4-percent GDP growth it posted in the first quarter.

“GDP growth may slow mildly to 5.8 [percent] [year-on-year] in [the second quarter] as elevated inflation constrains consumer spending,” the think tank said in its latest Market Call report released on Tuesday.

The first-quarter GDP growth of the Philippine economy was the lowest in the past eight quarters or since the second quarter of 2021, based on historical data from the Philippine Statistics Authority.

Nonetheless, FMIC-UA&P Capital Market Research pointed out that it expects “strong gains” in construction sector due to “accelerating” infrastructure work as well as in the services sector due to revenge spending by Filipinos on transport, food, and accommodation.

“With these gaining further traction in [second half] and sharply lower inflation rates to average 3.3 percent by [fourth quarter], we see a return to above-6 percent full-year growth in 2023,”

FMIC-UA&P Capital Market said the 6 percent or higher

See “Q2,” A2