MANILA — An official of the Bangko Sentral ng Pilipinas (BSP) is sanguine that the domestic economy’s output in the first quarter of 2015 would be the lowest for the year on back of improvement of economic indicators.
“Hopefully, the first quarter will be the floor,” Francisco Dakila Jr., Managing Director of the central bank’s Monetary Policy Sub-sector told reporters Thursday.
Dakila stressed that his outlook is his personal idea and not the position of the central bank.
Growth of the domestic economy in the first three months of the year went down to 5.2 percent from quarter-ago’s 6.6 percent on back of the drop in net exports and government spending.
However, Dakila, citing the central bank’s inflation report for the second quarter of 2015, said reports on growth of vehicle sales remain at double digit and the purchasing managers’ index (PMI) remain above 50 level, which indicates positive situation for the manufacturing sector.
He also said that capital utilization remains strong with businesses still bullish on their operations.
He is optimistic that problems encountered in the first three months of the year, particularly on government spending, will be addressed until the rest of the year.
“Now that the government is aware of the need to accelerate fiscal program it should see acceleration of government spending,” he said.
The central bank official, on the other hand, pointed out that amidst the deceleration of domestic growth in the first quarter of the year, domestic output, as measured by gross domestic product (GDP), remained “respectable.”
He said the first quarter figure is above the economy’s average growth in the past years.
“Something above the long-run average for the Philippines is already an improvement,” he said referring to the long-run average of about five percent.
“If sustained you can characterize the growth as being firm,” he added.