053107: Analyst sees 2007 GDP target achievable

May 31, 2007
Updated 13:29:14 (Mla time)
Rocel Felix
Xinhua Financial News Service

MANILA, Philippines -- The stronger-than-expected gross domestic product growth in the first quarter means the economy is on course to hit the government's growth target for this year of 6.1 to 6.7 percent, said Banco de Oro (BDO) Universal Bank market strategist Jonathan Ravelas.

The government reported that GDP was 6.9 percent bigger in the first quarter than a year before, growing at the fastest pace in almost two decades, propelled by strong services and industrial output. GDP was a seasonally adjusted 2.5 percent bigger than in the fourth quarter of last year.

Ravelas remarked: "The numbers released look really very positive. They exceeded expectations, with all the sectors, especially the services and industrial sectors, performing quite well."

He said favorable economic conditions had spurred the growth in the first quarter.

"The low interest rates, along with the strong peso, provided a very good business environment, particularly for the industrial sector, while imports of goods used in manufacturing became cheaper," he said.

Ravelas said it was likely that the economy would be able to sustain its growth for the remaining quarters of this year, especially if the government continued its pump-priming.

He said he expected the peso to stay strong and activity in the sectors that are the primary drivers of growth to remain vigorous.

If the weather is favorable, the agricultural sector, which accounts for a fifth of the economy, should also continue to grow, he said.

($1 = P46.15)