2Q GDP Growth - 7.5%!

PHILIPPINES - In Brief 29 Aug 2013 by Romeo Bernardo

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Philippine economy grew 7.5% in the second quarter year-on-year, surpassing analysts' forecast, the National Statistics and Coordination Board reported Thursday. The April to June quarter figure sustained the high growth momentum of the country, the fourth straight quarter of higher than 7% growth.   Private consumption, capital formation and public spending continued to fuel growth on the expenditure side, with growth rates of 6.2% , 13.2% and 17 %, respectively, validating view on internal growth sources at this time. Exports weighed this down a bit with a 6.5% drop, around same as the first quarter's.   On the production side, services sector contributed mainly to growth, posting a 7.4% increase. The industry sector also emerged as a top growth driver with 10.3% growth: manufacturing and construction, in particular, rose by 10.3% and 17.4%, respectively.   Socioeconomic Planning Secretary Balisacan said that the country will likely surpass its 6-7% GDP growth target for the year. The country’s 2Q growth was also highest in the ASEAN region: Indonesia at 5.8%, Vietnam at 5%, Singapore at 3.8%, Thailand at 2.8%, and Malaysia at 4.3%.   We earlier forecasted a 7% growth for the second quarter on the back of a 7.8% reported first quarter growth. Without the effect of election-driven front-loading of government spending observed in the first semester, we anticipate some growth slowdown in the second semester and maintain our forecast of 7.2% for the entire year (In a Good Place, Aug 08, 2013).   The Philippine Stock Exchange closed 3.6 % higher today, recovering bit from past few days tumble.  The peso stayed in place at P44.75 to the dollar.