Philippines GDP Growth Below Expectations


The Philippines economy grew an annual 6.0 percent in the September quarter of 2015, accelerating from an upwardly revised 5.8 percent expansion in the previous three months but weaker than market consensus. A faster increase in household and government spending and exports offset a slowdown in investment.

On the expenditure side, household consumption grew by 6.3 percent year-on-year, as compared to a 6.2 percent increase in the second quarter 2015. Government expenditure expanded by 17.4 percent, surging from a 3.9 percent growth in the  preceding quarter, mainly due to an  increase in the disbursement of major government expenditures and other operating expenses. Gross domestic capital formation increased by 8.9 percent, slowing from a 17.2 percent growth in the previous quarter as all of its components rose. Investment construction grew by 5.3 percent year-on-year, followed by durable equipment  (+12.1 percent), breeding stocks & orchard development (+3.6 percent) and intellectual property products (+24.6 percent). 

Exports expanded by 6.4 percent, accelerating  from a 2.1 percent growth in the June quarter, as sales of goods rose 5.4 percent and those of  services increased by 11.6 percent. Outbond shipments of goods rose for: electronic components (+25.7 percent); cathodes & sections of cathodes, of refined copper (+6.8 percent), ignition wiring sets (+7.4 percent) and petroleum products (+10.6 percent). Growth in exports of services were mainly contributed by miscellaneous services (+13.0 percent), government (+9.7 percent), travel (+8.9 percent) and transportation (+6.0 percent). Imports increased by 13.5 percent, accelerating from a 10.4 percent rise in the second quarter, mainly driven by higher purchases of goods (+14.4 percent) and those of services (+9.3 percent).  Among goods, purchases of medical and pharmaceutical products increased the most by 81.2 percent, followed by machinery and mechanical appliances (+40.7 percent), paper products (+40.5 percent), base metals (+30.3 percent), electronics (+24.2 percent), electrical machinery (+21.1 percent), chemical products (+18.8 percent), cereals (+17.7 percent), artificial resins (+15.2 percent) and dairy products (+9.0 percent). Among services, miscellaneous services rose the most by 29.4 percent, followed by government (+8.1 percent) and travel (+4.1 percent).

On the production side, the services sector advanced 7.3 percent year-on-year, slowing from a 8.0 percent growth in the previous quarter. Growth in the sector were contributed by: other services (+8.0 percent); real estate, renting & business activity (+7.7 percent);  trade and repair of motor vehicles, motorcycles, personal and household goods (+7.9 percent); transportation, storage and communication (+7.6 percent); financial intermediation (+6.0 percent) and  public administration & defense compulsory social security (+3.1 percent). The industry sector grew by 5.4  percent, accelerating from a 4.2 percent growth in the preceding quarter. Electricity, gas and water supply grew the most by 6.7 percent, followed by manufacturing (+5.6 percent), construction (+4.8 percent) and mining & quarrying (+0.9 percent). The agriculture, hunting, forestry and fishing (AHFF) expanded by 0.4 percent, reversing from a 5.7 percent contraction in the June quarter. The growth was weighed down by a 0.1 percent decline in agriculture despite the improvement in forestry and fishing by 10.3 percent and 1.7 percent, respectively. 

For 2015, the economy is expected to grow between 6.0 percent to 6.5 percent. Risks to the growth particularly would come from El Nino weather pattern and political uncertainties ahead of the country’s general election in May next year.

On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.1 percent in the third quarter of 2015, slowing from a 1.8 percent expansion in the preceding quarter, as expansion in the services and industry sectors slowed while the agriculture sector contracted further. 

Philippines GDP Growth Below Expectations


PSA l Rida Husna | rida@tradingeconomics.com
11/26/2015 10:51:28 AM