The economy may slow down this quarter from the previous on slacking imports, tourism, electricity consumption and volatility in financial markets, according to an index of 11 key data collated by the state statistics office.
In a report released Monday, the Philippine Statistical Authority (PSA) said the composite leading economic indicator (LEI) — a short-term forecasting tool made up of data tracking the economy’s expansion — was lower at 0.037 this quarter from a revised 0.141 in the fourth quarter of 2013.
“This indicates that the country’s economic activity may slow down during the quarter,” the report read.
The economy grew by 6.5 percent in October to December, putting the full-year number at 7.2 percent.
Sought for comment, Bank of the Philippine Islands economist Emilio Neri Jr. said also he expects further deceleration this quarter.
“We don’t expect a contraction, but we do expect further deceleration,” he said by phone Monday, estimating first quarter growth hitting “sub-six percent.”
For this quarter, only three of the 11 indicators, which account for 27.3 percent of the total from 77.6 percent in the third quarter, contributed positively.
The positive contributors, starting with the largest positive contributor, include: number of new businesses, terms of trade index, and consumer price index.
Meanwhile, negative contributors, beginning with the largest negative contributor, were: total merchandise imports, stock price index, money supply, visitor arrivals, foreign exchange rate, electric energy consumption, wholesale price index, and hotel occupancy rate.
Negative factors comprise for 72.7 percent of the index.
BPI’s Neri said that production and imports will be a main drag, noting that capital expenditure “will slow down” amid financial market being “very, very volatile.”
Emerging-market economies saw their stock, bond and currency markets sank after the US Federal Reserve cut its monthly bond-purchasing by $10 billion this month and the last.
Neri, however, sees the economy picking up pace in the succeeding quarters as markets calm and firms and government ramp up spending.
“The first quarter will be the bottom as far as headline numbers go year-on-year,” he said.
The Aquino administration targets growth of 6.5 to 7.5 percent this year. — BM, GMA News
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