The country’s gross domestic product (GDP) rose by 7.5 percent in the second quarter of the year, higher than the 6.3 percent for the same period in 2012.
Although slightly lower than the first quarter’s 7.8 percent, the second-quarter figure boosted first semester GDP to 7.6 percent, higher than the 6.4 percent in the first semester of 2012.
Socio-economic Planning Secretary Arsenio Balisacan said Thursday higher public and consumer spending helped the country defy an Asian slowdown.
The data provides a welcome boost to the government at a time when the country’s stock market and currency slump as foreign investors pull out of emerging economies in expectation of an end to the US Federal Reserve’s stimulus.
“While other economies that were growing at a fast rate are now decelerating due to a global slowdown, the Philippine economy has shown an ability to withstand external shocks,” Balisacan said.
The services sector remained the biggest growth booster, improving by 7.4 percent and accounting for 57.9 percent of the total GDP.
Manufacturing grew by 10.3 percent and construction by 17.4 percent to lead the industry sector, which grew by 10.3 percent.
The agricultural sector had the slowest growth: 9.4 percent of the total GDP for the second semester.
Economics professor and analyst Benjamin Diokno said in a text message that the impact of the “one-time election spending” contributed to the rise of the second quarter growth.
With election spending, growth will be much lower, Diokno said.
“The consensus is that second half growth will be slower than the 7.6 percent first half growth. How slower would depend on how strong the recover the world economy is, the severity of the weather and how well the economy can withstand foreign capital outflow,” he said.
The government had projected a 6 to 7 percent GDP for the year.
The 7.5-percent growth reflects the continued resilience of the domestic economy, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said.
“This outturn is broadly in line with many projections of the market analysts,” he said in a text message.
Tetangco hopes the growth will help further build market confidence.
Finance Secretary Cesar Purisima said the second- quarter data is the best evidence the economy is moving from strength to greater strength despite the volatile global environment.
“This sixth straight quarter of growth above 6 percent makes a strong case to differentiate the Philippines from other emerging market countries, which tend to be resource-driven and export-dependent,” Purisima said.
He said the Department of Finance will push for key reforms to attract more investments and continue the fight against corruption, revenue leakages, and vested interests that prevent the Philippines from reaching its full potential.
Budget Secretary Florencio Abad said predicted the economy will continue to surpass expectations.
“While the statement is often repeated, its truth is plain and exact: good governance is good economics. Our country’s economy is sufficient proof of that,” Abad said.
Thursday’s data marks the fourth straight quarter of growth above 7.0 percent.
The Philippine economy is now expanding faster than any other in Southeast Asia, while the second-quarter results are in line with growth in regional powerhouse China.
The country achieved an investment-grade credit rating this year, further boosting business confidence as inflation remained tame and the government’s finances improved.
Emilio Neri, corporate economist of Bank of the Philippine Islands, one of the country’s top lenders, told AFP the high growth figures for the first half were “a fairly rare feat considering that everybody else is going down”.
Manila has avoided the worst because it had not been to dependent on foreign funds and did not borrow too much abroad at the height of the US Fed’s easy money policy.
“We did not get a hangover from this party that the US Federal Reserve hosted,” Neri added.
WITH REPORTS FROM MAYVELIN U. CARABALLO AND AFP