Philippines GDP Growth Beats Expectation


The Philippines economy grew 6.9 percent in the last quarter of 2014, faster than a 5.3 percent expansion in the previous three month period. It is the strongest pace in five quarters, as exports and household and government spending showed strong growth.

On the expenditure side, household consumption grew by 5.1 percent year-on-year, following a 5.2 percent  increase in the July to September quarter. Government expenditure expanded by 9.8 percent, recovering from a 2.6 percent decline in the  preceding quarter, mainly due to high cash disbursement of major government expenditures for salaries and wages as well as maintenance and operating expenses.

Exports expanded 15.5 percent, accelerating from a  9.8 percent increase in the previous quarter, mainly due to higher sales of goods and services. Outward shipments of goods increased significantly for: medical/industrial instrumentation (+119.9 percent), control instrumentation (+71.3 percent), componens/devices (semiconductors) (+29.1 percent), office equipment (+32.7 percent), telecommunication (+27.1 percent), coconut oil (+190.0 percent), cathodes & section of cathodes, of refined copper (+73.3 percent), ignition wiring sets (+13.7 percent), basketworks (13.0 percent) and metal components (+11.1 percent). Imports increased by 5.3 percent, following a 5.8 percent fall in the third quarter, mainly driven by higher purchases of artificial resins (+69.5 percent), cereals (+40.8 percent), base metals (+39.5 percent) and mineral fuels (32.4 percent).

Gross fixed capital formation declined by 4.9 percent, following a 10.1 percent increase in the previous quarter, as investments in durable equipment contracted by 0.6 percent year-on-year while investment in construction showed  a strong growth of  21.9 percent year-on-year.

On the production side, the industry sector grew 9.2  percent year-on-year, following a 7.6 percent expansion in the preceding quarter. Construction expanded the most by 25.0 percent, followed by manufacturing (+10.7 percent) and electricity, gas and water supply (+5.5 percent). However, mining & quarrying declined by 3.2 percent after registering a 7.8 percent growth in the third quarter.

The services sector advanced by 6.0 percent, after posting a 5.4 percent growth in the previous quarter, with all subsectors recorded an expansion. Public administration & defense compulsory social security rose the most by 10.9 percent, followed by real estate, renting & business activity (+8.3 percent); financial intermediation (+6.6 percent); transportation, storage and communication (+6.3 percent); trade and repair of motor vehicles, motorcycles, personal and household goods (+5.3 percent) and other services (+2.5 percent).

The agriculture sector expanded 4.7 percent, reversing from a 2.7 percent decline in the third quarter. The top contributors to the growth were: corn (+26.8 percent), agricultural activities and services (+8.1 percent), palay (+6.8 percent), forestry subsector (+5.2 percent), cassava (+3.8 percent), banana (+3.3 percent) and poultry (3.0 percent). In contrast, a decline in this sector came from: mango (-5.6 percent), coffee (-3.1 percent), rubber (-2.0 percent), coconut including copra (-1.4 percent), sugarcane (-1.1 percent) and other crops (-0.3 percent). 

On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 2.5 percent in the fourth quarter of 2014, significantly faster than a revised 0.7 percent growth in the previous three-month period.

For full year of 2014, the country grew by 6.1 percent, as compared to a 7.2 percent expansion in the previous year, missing the goverment's target of 6.5 to 7.5 percent.

Philippines GDP Growth Beats Expectation


National Statistics Coordination Board l Rida Husna l rida@tradingeconomics.com
1/29/2015 9:18:37 AM