PHL economy grows 7.5 percent in Q2, faster than Asian neighbors

Driven by a resilient services sector as well as robust manufacturing and construction activities, the Philippine economy did quite well in the second quarter by growing much faster than its Asian neighbors and on a par with that of China.

At a press conference Thursday, National Statistical Coordination Board (NSCB) Secretary General Jose Ramon Albert said the Philippine gross domestic product (GDP) expanded by 7.5 percent in the second quarter, above the 6 to 7 percent growth goal this year. 

 

The latest figure is higher than the revised 6.3 percent posted in second quarter of 2012, but slower than the revised 7.7 percent recorded in first quarter of 2013 which was the fastest in Asia.

 

At the same press conference, Socioeconomic Planning Secretary Arsenio Balisacan noted “this is the fourth consecutive quarter in which the Philippine economy grew above 7 percent.

 

“This only confirms the economy is now at a higher growth trajectory... The most important one, the components of our economy show that we are moving to investments from services,” Balisacan added, noting that growth in manufacturing has outpaced services. 

 

The 7.5 percent compares with a 7.3 percent consensus in a GMA News Online poll of economists. 

 

Balisacan said that the Philippine economy bested Southeast Asian neighbors and grew at the same pace as China in April to June. 

 

Indonesia grew by 5.8 percent; Thailand, 2.8 percent; Vietnam, 5 percent; Singapore, 3.8 percent; Malaysia, 4.3 percent; Hong Kong 3.3 percent; Japan, 2.6 percent; Taiwan, 2.5 percent; and South Korea, 2.3 percent.

 

Benjamin Diokno, professor of economics at the University of the Philippines and former Budget Secretary, noted the higher than consensus growth still failed to surprise on the upside. “It is in accordance with expectation that growth will be slower though it remains strong because of election spending,” he told GMA News Online in a text message.

 

Bede Lovell Gomez, First Metro Investments Corp. assistant vice president and deputy group head of investment advisory, said the slower second quarter output is still above the consensus and above the target of 6 to 7 percent of the government.

 

“This should differentiate us from other markets where growth rate is below 5 percent,” he said.

 

NSCB’s Albert said that second quarter GDP is not bad and could have been better if not for the 0.03 percent clawed out by the agriculture sector.

 

The second half is expected to be slower than the first in the absence of election spending and because of seasonality.

 

“How much slow remains to be seen in the light of damaging typhoons and the ongoing unwinding of hot money which would have impacts on the stock market and the peso,” Diokno said.

 

Purely on seasonality, Gomez said the third quarter output might be slower than 7.5 percent. “It should go back to around 7.5 percent in the fourth quarter or even higher. We are confident this will be sustained for the next three years,” he added. — With Danessa Rivera/VS, GMA News