The Philippines economy expanded 5.3 percent in the third quarter of 2014, the weakest pace since last three months of 2011. A rise in consumption and investment was not enough to offset a decline in government spending and a slowdown in exports.
On the expenditure side, household consumption grew by 5.2 percent year-on-year, following a 5.3 percent increase in the second quarter. Food expenditures, which accounted for 41.2 percent of total private consumption, slowed by 3.6 percent from a 4 percent increase in the preceding quarter.
Government expenditure declined by 2.6 percent, after registering a 0.02 contraction in the preceding quarter, mainly due to delays in the disbursement of major government expenditures for salaries and wages as well as maintenance and operating expenses.
Gross fixed capital formation accelerated 10.1 percent, after registering a 4 percent growth in the April to June period, as investments in construction back to its double-digit growth of 12.3 percent year-on-year.
Exports slowed to 9.8 percent from a 10.3 percent increase in the previous quarter, mainly due to lower sales of goods (+9.8 percent from double digit growth in the second quarter). Sales declined for automotive electronics (-73.9 percent), cathodes & section of cathodes (-79.6 percent), petroleum products (-49.8 percent) and tuna (-32.9 percent). Imports decreased by 5.8 percent, driven by slower purchases both of goods and services.
On the production side, the industry sector grew 7.6 percent year-on-year, following a 7.8 percent expansion in the preceding quarter. All subsectors in the industry showed positive growth with construction expanding the most by 11.9 percent, followed by mining & quarrying (+7.8 percent), manufacturing (+7.2 percent) and electricity, gas and water supply (+3.3 percent).
The services sector expanded by 5.4 percent after registering a 6.0 percent growth in the second quarter. All subsectors in the services grew except for public administration & defense (compulsory social security declined by 2.9 percent). Financial intermediation expanded the most by 7.7 percent year-on-year, followed by real estate, renting & business activity (+6.2 percent); trade and repair of motor vehicles, motorcycles, personal and household goods (+6.1 percent) and transportation, storage and communication (+5.3 percent).
In contrast, agriculture shrank by 2.7 percent, reversing from a 3.6 percent growth in the previous quarter. A decline in agriculture came from a decrease in palay output (-10.0 percent), coffee (-9.1 percent), corn (-5.8 percent), coconut including copra (-5.8 percent), poultry (-3.7 percent) and forestry subsector (-56.9 percent).
On a quarter-on-quarter seasonally adjusted basis, the GDP rose 0.4 percent in Q3, down from a 1.9 percent expansion in the previous three-month period.
11/27/2014 2:38:05 PM