Slower GDP growth seen in 1st quarter

Economic growth slowed down in the first quarter of the year as the country struggled with the lingering effects of Super Typhoon Yolanda, made worse by unstable financial markets. (CDN FILE PHOTO/ LITO TECSON)

MANILA, Philippines—Economic growth likely slowed down in the first quarter of the year as the country struggled with the lingering effects of Super Typhoon Yolanda, made worse by unstable financial markets.

An Inquirer poll this week showed five of eight analysts expecting year-on-year gross domestic product (GDP) growth to be slower in the January-to-March period than in the fourth quarter of 2013.

Apart from the effects of Yolanda and other natural and man-made calamities, GDP numbers may have also been dragged down by high base effects. In the first quarter of last year, GDP grew by 7.7 percent.

“No one really knows the full extent of the storm, but that should be reflected in the first quarter,” Security Bank house economist Patrick Ella said in an interview yesterday.

Security Bank was among the optimists, projecting that the economy likely grew by 6.6 percent, accelerating slightly from 6.5 percent in October to December. Standard Chartered and ING were the two other optimists, projecting growth to reach 6.5 and 6.8 percent, respectively.

Five other banks—Barclays, HSBC, Bank of the Philippine Islands (BPI), DBS and Metrobank—said first-quarter growth likely decelerated to around 6 to 6.2 percent.

The Philippine Statistics Authority is scheduled to release first-quarter GDP data Thursday.

“It will be one of the weaker quarters this year,” BPI lead economist Emilio Neri Jr. said in an interview. “Hopefully, it will be a one-off slowdown. As we approach the second to fourth quarters, we’ll probably see a rebound.”

Infrastructure spending, driven by reconstruction efforts in Visayas, should help prop up growth in the later months of the year, Neri said.