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  3 Apr 2009

Philippines sees another single-digit growth in Q2

The Philippine economy will likely grow within single-digit levels for the second time in the next quarter as the global crisis worsened earlier than expected, reported a local broadcaster.

GMA news was citing the forecast of the University of Asia and the Pacific (UA&P) and the First Metro Investment Corp (FMIC) in a report called the Market Call.

The economy will grow below four percent in the second quarter, UA&P and FMIC said.

But at the same time, the two entities expressed confidence that remittances – and their multiplier effect – will prevent the economy from growing below 3.5 percent in the next three months.

The report identified indicators that showed a slowdown in economic expansion, including electricity consumption, exports, and unemployment.

Lopez-led Manila Electric Co. (Meralco), the Philippines’ largest power distributor, reported lower electricity sales, the report said, indicating reduced consumption by businesses, among others.

Meanwhile, January’s export figures reached a record low of 41 percent as the recession cut appetite for Philippine-made goods, resulting in reduced factory output and layoffs.

As a result, unemployment rose to 7.7 percent in January, higher than the 7.4 percent reported during the same period last year, with the highest rate recorded in the National Capital Region at 14 percent.

"Widely publicised layoffs in the manufacturing sector were validated by the reported decline of 122,000 posts in the sector," the report said.

“Surprisingly, however, heightened infrastructure spending by the government failed to stimulate the construction industry which suffered a 2.2 percent drop in employment which may point to a more notable slowdown in private construction."

With weak commodity prices and the slowing economy, inflation will “continue its rapid year-on-year decline" to break the five percent barrier by April and reach as low as two percent by June.




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