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Philippine Q2 GDP growth seen up from Q1

Reuters - Monday, June 22

MANILA, June 22 - The Philippines will avoid a recession this year with second-quarter growth expected to outperform the first three months of the year as the government accelerates spending to rev up the economy, a government official said.

"We expect things to be better than the first quarter," Rolando Tungpalan, deputy director general of the National Economic and Development Authority, told reporters on the sidelines of the launch of a United Nations jobs and migration programme on Monday.

He said barring external shocks, annual growth should gather speed in the second quarter, with government and consumer spending picking up, supported by modest remittance flows.

"Surely there is no recession. Resiliency will win over recession."

Tungpalan echoed comments by the socioeconomic planning chief Ralph Recto who said last month the economy was certain to grow in this quarter, buoyed by spending. The government has pledged to spend 330 billion pesos on stimulus this year.

Manila has cut its economic growth target to 0.8-1.8 percent this year from 3.1 to 4.1 percent following a poor first quarter.

The economy shrank a seasonally adjusted 2.3 percent in the first three months from the previous quarter, the worst in two decades, bringing annual first-quarter growth to 0.4 percent.

The International Monetary Fund expects the economy to shrink by 1 percent this year after a 4.6 percent expansion in 2009. (Reporting by Manuel Mogato; Writing by Karen Lema; Editing by Jan Dahinten)

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