Q1 economic growth slows to 4.8%

Manila — Slow government spending and weakening global trade constricted Philippine economic growth to 4.9 percent in the first quarter of the year, officials said Monday.

Economic Planning Secretary Cayetano Paderanga said the growth rate was within the government’s forecast of an expansion of 4.8 percent to 5.8 percent in the first quarter and supported by growth in agriculture and industry.

But he said public investment in infrastructure contracted as government agencies became more careful with their budgets.

The economy grew a blistering 8.4 percent in the first quarter last year.

To boost growth in the coming quarters, government will spend the rest of its budget in the remaining months of the year, address corruption, lower the cost of doing business, and put in place a development plan that tackles the high rates of unemployment and poverty incidence, Paderanga said.

The Philippines posted its highest annual economic growth of 7.6 percent in 2010. The figure was revised from the earlier announced 7.3 percent after a recalculation using 2000 instead of 1985 as base year.

The agriculture, hunting, forestry and fishing sector grew 4.2 percent in the first quarter after a contraction last year, boosted by a good harvest of rice, sugarcane and corn and strong demand for chicken.

Industry grew 7.2 percent on expansion of food and electronics manufacturing, private sector construction and gains by the mining and quarrying industries from higher global prices for metals and other minerals.

The services sector, the largest contributor to gross domestic product with a 55 percent share, grew by 3.7 percent.

Meanwhile, President Aquino  said that he was optimistic that the economy’s growth will pick up despite the dismal 4.9-percent gross domestic product posted in the first three months of the year.

The President, however, noted yesterday that the country did not turn out badly even if it shared the same fate of its neighbors-being affected by the political riots in the Middle East and the strong earthquake that shook Japan, which happens to be the Philippines’ biggest trading partner and source of foreign assistance.

But Mr. Aquino said he was optimistic for the rest of the year, with his government starting to pump prime the economy in the second quarter of the year and now that oil prices in the market have started to stabilize.

“We believe our (growth) numbers will improve,” Mr. Aquino told reporters in an interview in Malacañang, a few hours after economic officials announced that the economy expanded by a lower-than-expected 4.9 percent in the three months to March which they attribute to a drop in global trade and less spending on infrastructure. /inquirer