Research group says PHL Q2 economy was 'unexciting'

Second-quarter economic indicators are showing mixed results and pointing to another “unexciting" performance similar to the 4.9-percent gross domestic product (GDP) expansion in the first quarter, a research group said Wednesday. “The Market Call," a publication by the First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P), made the projection ahead of the inflation figures government will announce this Friday. On the negative side, industrial production registered a slower pace in May and is likely to manage only a 2-percent uptick in the second quarter, “The Market Call" said. “This was caused by a slump in exports which became negative at -3.2 percent in May as EU plunged by 42 percent," the FMIC and UA&P publication explained. Overseas Filipino Worker (OFW) remittances, on the other hand, picked up pace from the first quarter posting a 6-percent growth in April and May. The national government’s deficit was narrower by 94 percent in the first five months of 2011, to P9.4 billion, compared to levels in the same period in 2010, “The Market Call" added. The publication also said government’s operational and capital spending showed a 33-percent increase in the second quarter compared to the first-quarter monthly average. Inflation remained subdued as it inched up to 4.6 percent in June, only higher by 0.1 points than in May. “Mining, construction, BPO, agriculture, and manufactured exports are likely to provide significant boost to the economy as to bring it back to an over-6 percent GDP growth path later in the year," a note on the highlights of the July issue said. “Inflation will remain relatively calm in Q3 on the back of stable rice and food prices, lower electricity rates, and fairly flat crude oil prices, even though it may rise slightly due to base effects. With inflation fairly muted and the economy still on the recovery mode, it is unlikely that BSP will increase policy rates in Q3, although another small rise in reserve requirement cannot be discounted," the note added. — With Paterno Esmaquel II/VS, GMA News