By Alito L. Malinao
MANILA, June 1 (Xinhua) -- The Philippine economy bounced back from a lackluster performance last year and grew by an unexpected 6.4 percent in the first quarter of this year, raising hopes that the country would be spared from the fallout of the worsening financial crisis in the Eurozone.
Government officials here said that the expansion of the gross domestic product (GDP) could be attributed to increased government spending on infrastructure projects and the growth in the services sector.
The country's GDP growth in the first quarter of 2011 was only 4.9 percent and the full-year growth last year was a dismal 3.7 percent.
With the surprising growth in the first three months, officials said the target of 5-6 percent GDP growth for the whole year would be attainable, and could even be surpassed.
In a press briefing on Thursday, Arsenio M. Balisacan, the newly appointed socioeconomic planning secretary, said the first quarter growth was well above the market's consensus forecast of 4.8 percent.
Balisacan, who is also the director general of the National Economic and Development Authority (NEDA), said the Philippines posted the highest growth among the member-countries of the Association of Southeast Asian Nations (ASEAN) and other emerging economies in the region, except China.
NEDA is the highest economic policy-making body in the Philippine government.
He said that the first quarter growth was supported by accelerated government spending, better-than-anticipated exports performance, continued credit expansion, remittances, tourism, and business and consumer confidence.
Balisacan said that tourist arrivals in the first quarter reached 1.15 million, while remittances by overseas Filipino workers increased by 5.4 percent to 4.84 billion U.S. dollars.
The growth in the first three months translated to 1.101 million in additional jobs, mainly in services and industry, he added.
In a statement, Malacanang, the country's seat of government, said the first quarter GDP figure "validates the optimistic outlook of President Aquino and his economic team."
"As the Aquino administration has been resolute in carrying out its agenda of reform and in institutionalizing good governance, it will continue to be equally steadfast in translating our economy' s gains into employment opportunities, programs geared toward poverty alleviation, and the systemic improvement of the way of life of Filipinos," the statement said.
Despite the euphoria in the Aquino administration, some sectors have expressed doubts that the government could sustain its first quarter growth.
In a report, the Hong Kong and Shanghai Banking Corporation ( HSBC) said the country's surprising growth in the first quarter may slow down in the remainder of the year, saying the crisis in the Eurozone may cause the increase in export earnings and remittances to decelerate.
HSBC also maintained its earlier forecast that full-year growth this year would be 4.4 percent, or below the government's 5-6 percent growth target.
"Growth, while continuing to be robust, will likely slow in the next quarters," the HSBC said.
It said exports, although expected to record positive growth, will normalize and expand at a more modest pace due to the worsening euro zone crisis, the slowing down of China, as well as the gradual decrease of consumer confidence in the United States.
In the first quarter, according to the National Statistics Office, exports grew by only 4.6 percent to 12.86 billion U.S. dollars from a year ago. The Eurozone, the United States, and China are the country's major export markets.
Analysts said that growth in China, the world's fastest growing economy could slow down to 8.2 percent in 2012.
Another factor that could trigger a slowdown in economic growth in the rest of the year is a potential deceleration in government spending, the HSBC said.
Data from the Bureau of the Treasury showed that government spending grew by 9 percent to 122 billion pesos (about 2.81 billion U.S. dollars) in April from a year ago. This was slower than the nearly 20 percent rise recorded in the first quarter.
Professor Benjamin E. Diokno of the School of Economics of the University of the Philippines also said that the better-than- expected economic growth may not necessarily be sustainable.
Reports quoted Diokno as saying that that export growth exceeding imports growth, as shown in government figures, was " unusual" because of the small growth in exports.
He said this may indicate that imports, especially electronic products that make up the bulk of shipments, must really be low given the recent rise in petroleum imports. "Certainly, the positive net export is not sustainable and perhaps not even consistent with strong growth in the future. The global market is shrinking and volatile," Diokno said, adding that the Philippine economy should be based on domestic demand.