PHILIPPINE DAILY INQUIRER - August 25, 2009

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Q2 economic growth seen at 2%

THE PHILIPPINES DODGED RECESSION IN THE SECOND QUARTER to become one of few Asian economies to withstand the deepest global slump in decades, thanks to strong inflows of remittances and increased state spending, a Reuters poll shows.

Seven out of 12 economists forecast the economy grew by a seasonally adjusted 2 percent in the second quarter, a reversal of the previous quarter’s contraction of 2.3 percent.

On an annual basis, growth likely picked up to 0.6 percent in the second quarter, from 0.4 percent in the first quarter, the poll showed.

Standard Chartered Bank was the most pessimistic, saying the economy contracted by 0.5 percent year-on-year in the second quarter.

At the other end was Banco de Oro Universal Bank, which said growth from April to June should come in at 2.3. percent.

The National Economic and Development Authority said last week the economy likely bottomed out in the first half and should post stronger growth later this year when election-related spending starts and consumers shop ahead of the Christmas holidays.

Analysts said the data is unlikely to alter views that policy rates will remain on hold at a record low for the rest of the year, with the central bank focusing on the economy’s performance in the second half of 2009 to gauge the strength of the recovery.