MANILA: Sluggish exports are expected to have weighed on the Philippine's first-quarter economic growth, but the outlook remained upbeat on strong domestic demand and infrastructure spending by the incoming administration.
Gross domestic product (GDP) was seen expanding a seasonally adjusted 1.6 percent in January-March from the previous quarter, a Reuters poll showed, slower than 2.0 percent growth in the fourth quarter of last year, as patchy global demand hurt exports.
Shipments dropped by the most in six months in March and that marked the 12th straight month that exports have fallen as demand from major trading partners -- United States, Japan and China -- have remained tepid.
But policymakers remained optimistic about the country's growth prospects, opting to stand pat on interest rates on May 12, citing strong domestic demand, manageable inflation and sufficient liquidity in the financial system.
First quarter GDP data will likely show weak external sector contributions but the Philippines should still post "healthy growth numbers driven by domestic demand," said Madhur Jha, senior economist at Standard Chartered Bank in a note.
Strong domestic demand continued to be underpinned by remittances, which rose 4.4 percent from a year earlier, sustained government spending on infrastructure and election-related spending.
From a year earlier, the economy likely grew 6.6 percent in the first quarter, faster than the previous quarter's 6.3 percent expansion, and matching the annual growth rate in the last three months of 2014, the same poll showed.
"Despite a fair degree of uncertainty in most parts of the world, particularly emerging markets, the Philippine economic outlook remains robust and the country continues to outperform," HSBC economist Joseph Incalcaterra said in a note.
"Economic policy is unlikely to change much (after the election), and the improvements in governance and fiscal management...are unlikely to be reversed."
Incoming Philippine President Rodrigo Duterte will continue his predecessor's macroeconomic policies focusing on higher infrastructure spending and fiscal efficiency, aides said on Thursday, as he pursues higher growth of 7-8 percent.
Duterte, who ran on a single-issue campaign focused on law and order for a presidential election on May 9, wants to speed up outgoing President Benigno Aquino's flagship public-private partnership programme.
He won the largest share of the votes in a May 9 presidential election, according to an unofficial count by a poll watchdog, although the official result has yet to be confirmed.
For the full-year, economists predicted growth of 6.1 percent, below the government's 6.8-7.8 percent growth target, but stronger than 5.8 percent expansion last year.
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