Q1 growth projected at 6%

Posted at 05/22/2014 7:23 AM

MANILA, Philippines - Philippine economic growth likely slowed down to six percent in the first three months of the year from the previous quarter, the Hongkong and Shanghai Banking Corp. Ltd. (HSBC) said.

“Growth is expected to slow down first quarter on weaker agriculture output due to the impact of Typhoon Haiyan,” HSBC Economist Trinh Nguyen said in a report.

Government data showed farm output in the first quarter rose by only 0.67 percent due to the typhoons that devastated the country late last year.

The effects of the typhoons in the second half of 2013 have also been felt through supply shocks that caused higher food prices, stoking inflation in first months of the year.

Nguyen said that aside from the agriculture output, slower net capital flows will also weigh down on economic growth.

In the first three months of the year, the country saw net outflows of foreign portfolio investments at $2.337 billion, a reversal of the $1.087-billion net inflow seen in the same period in 2013.

Official first quarter GDP data will be released by the government next week.

The six-percent forecast expansion for the first quarter is a deceleration from the 6.5 percent recorded in the fourth quarter of 2013.

HSBC expects growth in the second quarter of the year to remain at six percent before further slowing down to 5.7 percent in the third quarter. The bank also expects economic expansion to slightly accelerate to 6.1 percent in the fourth quarter of the year.

“The latest fourth quarter 2013 growth rate shows that the economy continues to be supported by robust household spending and strong growth of investment: all positive signs of domestic demand,” Nguyen said.

“Growth exceeded 7.2 percent in 2013 but will likely slow this year,” she added, noting the bank has forecast full-year expansion at 5.9 percent.