Philippines GDP Growth Beats Expectations
Philippine economy grew an annual 6.4 percent in the second quarter of 2014, faster than a revised 5.6 percent expansion in the previous three month period. The expansion was driven by industry, services and agriculture sector while government expenditure declined.
8/28/2014 9:13:11 AM
The industry sector expanded 7.8 percent year-on-year in the second quarter, down from 10.5 percent on the same quarter last year, but higher than 5.3 percent in the first quarter this year. The services sector grew 6.0 percent, down from 7.8 percent in the corresponding period a year ago and 6.8 percent during January – March 2014. Agriculture rebounded to 3.6 percent during the second quarter after a 0.2 percent decline last year. All industry sub-sectors, led by manufacturing; utilities; mining and quarrying and construction spurred to the robustness of the sector. All sub-sector of services also posted strong growth with real estate, renting and business activities became the main driver along with trade and repair service; transportation, storage and communication and financial inter-mediation. Mango, corn, cassava and Palay were recorded as the leading growth movers for the rebounding of agriculture.
On the expenditure side, household consumption rose 5.3 percent year-on-year from 5.1 percent last year and from 5.8 percent on the previous quarter. Food and non-alcoholic beverages expenditures, which accounted for 41.2 percent of the total private spending, grew by 4 percent annually from 5.0 percent in the previous year. Government expenditure in the second quarter of 2014 decelerated to 0.02 percent from 12.1 percent in 2013 due to the slowdown of major government expenditures for salaries and operating expenses. In the first quarter of 2014, government spending posted a 2 percent expansion. Gross fixed capital formation shrank to 4 percent yoy from 13.6 last year and following a 7.7 percent increase in the first quarter, as investment in construction and breeding stocks and orchard development declined by 5.1 percent and 2 percent respectively, while inventories diminished.
Exports surged 10.3 percent yoy from a decline 7.7 percent last year, but slowing from 12.6 percent on the first quarter of 2014, supported by double digit growth in both exports of goods and exports of services. Sales of electronic data processing surged 76.7 percent annually from a 12.6 percent contraction a year ago, articles of apparel and clothing grew 23.4 percent after a 21.9 percent fall in the previous year and ignition wiring set 22.1 percent from a 2.9 percent fall. Imports grew 1.4 percent from a 4.6 percent decline a year ago, largely due to the robust imports of services.
For the first half of 2014, the country’s GDP grew by 6.0 percent from 7.8 percent in the same period last year.
On a quarter-on-quarter seasonally adjusted basis, the Philippines GDP rose 1.9 percent in Q2, up from a revised 1.4 percent expansion in the previous three-month period.