Up from Q1, but hits low end of Q2 forecast range
PHILIPPINE ECONOMIC growth gained pace in the second quarter of the year to 5.6 percent from a revised 5.0 percent in the first quarter, but lagged far behind the 6.4 percent expansion recorded in the second quarter of last year, official figures released Thursday show.
The latest growth rate also hit the low end of forecasts ranging from 5.6 percent to 6.8 percent made previously by economists from private banks polled by The Manila Times.
Data released by the National Economic and Development Authority (NEDA) and the Philippine Statistics Authority (PSA) showed a contraction in the agriculture sector and in net exports in the April to June quarter, dragging the overall expansion in gross domestic product (GDP) during the period.
Despite the second-quarter improvement, the economy’s GDP performance in the first half of 2015 remained slower, at 5.3 percent, than the year-earlier 6.2 percent.
The first-half performance also fell short of the government’s target range of 7 percent to 8 percent growth for full-year 2015.
Industry, services lead growth
The industry sector posted a robust 6.1 percent increase, although the rise decelerated from the year-ago rate of 9.1 percent.
Services continued to be a major driver of the economy, clocking in 3.5 percent of growth during the quarter.
Contributing negative growth to the second-quarter GDP was the agriculture sector, which contracted 0.5 percent, reversing its 3.4 percent expansion a year earlier.
Net exports also dragged the GDP’s advance as outbound shipments of Philippine merchandise contracted by 3 percent in the quarter from 11.9 percent in the corresponding 2014 period.
Third fastest in Asia
The NEDA, however, said the Philippines posted the third highest growth among major Asian economies during the April-June period, behind only China and Vietnam.
“The second-quarter GDP growth shows the expanse of the country’s resiliency [amid]the prevailing weakness of the global economy,” Socioeconomic Planning Secretary Arsenio Balisacan told reporters in a press briefing.
The second-quarter economic expansion also reflects the significant improvement in government spending and the sustained strong performance of the private sector, he added.
Balisacan, who is also NEDA director general, highlighted the pick-up in government spending during the quarter, saying that consumption expenditure rose 3.9 percent from zero growth a year earlier and from 1.7 percent in the preceding quarter.
“This is a result of government’s efforts to address issues on spending bottlenecks, especially for public infrastructure, which held back growth in the first quarter. This significant improvement gives us more confidence about the performance of the public sector in the coming quarters of the year,” he said.
Private sector investment, on the other hand, remained brisk, with capital formation growing by 17.4 percent in the quarter, stepping up from 8.3 percent in the previous year and from 11.6 percent a quarter ago, the NEDA chief added.
“With this positive development in key areas of the country’s growth, we are now looking at an economy that can sustain a high growth trajectory in the future quarters,” he added.
As one of the countries with a respectable rate of growth, the Philippines remains an attractive market and investment destination. Our economic fundamentals are still strong, the Cabinet-rank NEDA official said.
“Thus, we have to ensure that we keep on improving this kind of environment to secure stability in the domestic economy and encourage greater investment for the generation of much needed high-quality job opportunities,” he added.