The Philippine Chamber of Commerce and Industry (PCCI) predicts a slower gross domestic product (GDP) growth in the second quarter of the year due to domestic problems plaguing both foreign and local businesses.
“It will be lower in the second quarter. We’re lucky if we can sustain the 5.7-percent GDP growth in the second quarter with what has happened with the truck ban, followed by the joint administrative order for colorum vehicles and the port congestion,” said PCCI President Alfredo M. Yao in an interview with reporters.
Yao, however, said the projected slowdown in the economic growth is an “artificial situation” and a rebound in the third and fourth quarter is expected.
The PCCI president said the prevailing congestion in Manila ports, brought about by the parking of both empty and laden cargoes in the yards of port operators, should be resolved by using barges to ship the cargoes to Batangas and Subic instead of relying solely on land transportation to relieve the congestion.
The Philippine Ports Authority should step in and aid in the decongestion of the ports, Yao said, to buttress the efforts being done by port operators to shift the cargo to provincial ports.
Yao also said the moratorium on the Joint Administrative Order of the Land Transportation Office, the Land Transportation Franchising and Regulatory Board and the Department of Transportation and Communications on stricter penalties and apprehension of colorum vehicles is a step in the right direction, and applications of truckers with colorum vehicles for the Certificate of Public Convenience should be expedited.
The country’s national output could have been above 6 percent in the second quarter, Yao said, had it not been for the said factors.
Despite the gloomy outlook for the second quarter, the PCCI president said the third and fourth quarter, historically, will register growth to reach the lower end of the 6.5-percent to 7.5-percent forecast of the National Economic and Development Authority for 2014.
“We can reach the lower end of the forecast, but it’s unlikely that we will match the full-year growth of 2013 at 7.2 percent,” Yao added.
In a previous report of the BusinessMirror, the Neda said a 6.8-percent growth is likely for the second quarter, due to the widespread reconstruction being undertaken in the wake of Supertyphoon Yolanda, whose effects on the GDP will likely diminish in the forthcoming quarters.
The country registered a below-expectations local output growth of 5.7 percent in the first quarter of the year, attributed to the lingering effects of Yolanda, which affected agricultural production and disrupted the supply chains that cut the growth of select industry sectors.
An executive of Maybank ATR Kim Eng, however, has a better forecast for the second quarter.
Luz L. Lorenzo, senior vice president and head of Research Department at Maybank ATR Kim Eng, told the BusinessMirror on Wednesday they expect the country’s GDP to accelerate by 6.3 percent from April to June this year, or 0.6 percent higher than the recorded 5.7 percent during the first quarter.
She noted that she expects a stronger GDP level in the second quarter as the country is “moving away from the [effects of] natural disasters [that happened] in the fourth quarter [of 2013],” especially with the continuous reconstruction activities now ongoing in the affected areas of Yolanda (international code name Haiyan) that hit the country last November 8.
“So that’s going to help [bolster infrastructure and construction] activities,” she said at a chance interview after she spoke on the coaching session exclusive to Maybank clients in Makati City.
Lorenzo added that the increase in private consumption, net exports and investments in the country could, likewise, drive the economic expansion during the period.
After registering a hike of 5.8 percent from January to March of this year, household consumption is projected to surge further to remain as the primary growth driver of the country’s GDP.
While the 6.3-percent GDP forecast for the second quarter is 1.2 percent shy of the 7.5 percent recorded in the same period last year, Lorenzo remains bullish that the Philippines could still reach its growth goal of 6.5 percent to 7.5 percent for the entire 2014.
Investment from both the government and the private sector, she said, will also aid in attaining such economic growth for the year.
“The Philippines is a long-term growth story. Beyond 2016, the prospects are still good. And the reason for that is because of the many structural reforms done over the many years,” Lorenzo said.
(With Roderick Abad)
Written by: Catherine N. Pillas