Philippine economy sizzles in second quarter

MANILA: The Philippine economy grew at a sizzling pace in the second quarter, topping expectations as a government-led construction boom and an extended rebound in the farm sector took some of the sting off a peso currency wallowing at 11-year lows.

The Southeast Asian nation is the second-fastest growing economy in Asia after China, with growth in the June quarter boosted by higher government spending and a stellar performance in the agriculture sector.

Gross domestic product (GDP) rose 6.5% in the second quarter from a year earlier, the national statistics agency said yesterday picking up from the 6.4% pace in the first quarter, and above the 6.2% forecast in a Reuters poll.

On a quarter-on-quarter basis, GDP expanded 1.7%, above the 1.6% growth projected in a Reuters poll, and faster than the previous quarter’s upwardly revised 1.3%.

“We are well on track to meeting our full-year target growth of 6.57.5%,” Economic Planning secretary Ernesto Pernia said.

The Philippines benefited from an improvement in global demand, with exports up nearly 14% in the six months to June. Household consumption grew at slightly faster annual pace of 5.9% in the second quarter compared with 5.8% in the first, while government spending jumped 7.1% in a dramatic rise from the revised 0.1% gain in the March quarter. The peso was steady after the GDP report, though markets remain focused on the currency’s outlook following a sharp slide.

Policymakers have sought to soothe frayed nerves in the foreign exchange market after the peso hit an 11-year low, saying currency movements do not reflect the underlying strength of the local economy. – AFP