Philippine economic growth quickens to 5.6 percent in the second quarter
Philippine economic growth quickened in the second quarter, the government said Thursday, placing the country in a better position to weather the global fallout from China’s economic woes.
Officials credited the growth to “prudent fiscal management” and policies pursued by President Benigno Aquino, which has helped transform the country into one of the fastest-growing economies in the region.
Boosted by higher government spending, the April to June gross domestic product ( GDP) grew 5.6 percent, outpacing the 5.0-percent growth in the previous quarter, which was the lowest in three years, Economic Planning Secretary Arsenio Balisacan said.
Despite the rebound, Balisacan said the economy was likely to grow from 6.0 to 6.5 percent for the full year, below the government’s 7.0 to 8.0 percent target.
Second quarter growth was also slower than 6.7 percent during the same period last year, data showed.
Balisacan and other officials stressed that the growth showed the country could weather the global financial turmoil.
“Our economic fundamentals are still strong. We have to make sure we are mindful of the challenges we are facing,” Balisacan told reporters.
“The quality and the rate of growth of the Philippine economy gives some assurance that with greater vigilance... we can withstand the volatile markets overseas,” he added.
President Aquino’s spokesman Edwin Lacierda said the growth was due to political stability “along with prudent fiscal management.”
“This stability has helped the Philippines weather external shocks, proving once again that good governance is good economics,” he added.
Finance Secretary Cesar Puri- sima said in a statement that “robust domestic demand,” along with the remittances from 10 million Filipinos working abroad and the booming business process outsourcing industry, were all lifting growth.
With the second quarter numbers in, Barclays said it cut its 2015 growth forecast for the Philippines to 5.5 percent, but said Balisacan’s expectation of 6.0 to 6.5 percent growth was “realistic.”
“Overall, despite the cut in our growth forecast, we expect the Philippines to continue to outperform the other ASEAN economies, with the country set to be the fastest growing economy among the major ASEAN economies for a third consecutive year in 2015,” Barclays regional economist Rahul Bajoria said in an e-mail.
But he warned that government spending still had not risen fast enough and exports had been weak, weighing down growth.