MANILA, Philippines – The Philippines sprinted to a fourth consecutive quarter of above seven-percent growth, beating forecasts with a strong 7.5-percent expansion in the April-June period to match China as the fastest-growing economy in Asia.
The National Statistical Coordination Board (NSCB) reported yesterday that the 7.5-percent gross domestic product (GDP) growth in the second quarter topped the 7.2-percent median forecast by analysts as well as the 6.3-percent pace recorded a year ago.
“The growth came mainly from consumer and public spending, buttressed by increased investments in fixed capital,” Jose Ramon Albert, secretary general of the NSCB, told reporters, adding that the services sector and manufacturing and construction also pushed up growth.
For the first half of the year, GDP accelerated 7.6 percent, faster than the 6.4-percent clip in the same period last year.
“The composition of our growth shows signs of an economy that is in the process of rebalancing, moving from being largely consumption-driven to becoming investment-led and industrialized, with the ability to provide higher quality jobs for Filipinos,” Socioeconomic Planning Secretary Arsenio Balisacan said in a statement.
He said for the past three quarters, capital formation has been growing more rapidly than household consumption and the growth of industry has so far outpaced that of the services sector. Notable are the double-digit growth rates in fixed capital and the manufacturing subsector in the last quarter.
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He pointed out that with the latest GDP results, the Philippines remains the fastest growing economy among emerging economies in the ASEAN region.
“The 7.5-percent growth, which is the same as that of China, surpasses the growth rates of our Asian neighbors. Within the ASEAN region, Indonesia grew by 5.8 percent; Vietnam by 5 percent; Malaysia by 4.3 percent; Singapore by 3.8 percent; and Thailand by 2.8 percent. Our growth rate is significantly higher than that of Hong Kong with 3.3 percent, Japan with 2.6 percent, Chinese Taipei with 2.5 percent, and South Korea by 2.3 percent.”
Thus, while other economies that were growing at a fast rate are now decelerating due to global slowdown, the Philippine economy has shown an ability to withstand external shocks, he pointed out.
He noted that the second-quarter expansion was also above the 6-7 percent target set by the multi-sectoral Development Budget Coordination Committee (DBCC) for this year.
“This only confirms that the Philippine economy is now on a higher growth trajectory,” Balisacan added.
Analysts said the solid growth pace lifted local stocks and the peso and would help the Philippines keep its favored status among investors amid more market volatility.
The Philippines has overtaken emerging economies such as Indonesia as a safer investment bet due to prudent management of fiscal and monetary policy. Recently, the country secured investment grade from international ratings agencies Standard & Poor’s and Fitch.
For his part, Finance Secretary Cesar Purisima said he is confident the country can retain its position as one of the fastest-growing economies in Asia given its strong macroeconomic fundamentals and resiliency amid the turbulence in international financial markets. – with Zinnia dela Pena, Kathleen Martin, Delon Porcalla