The Philippines economy advanced an annual 6.1 percent year-on-year in the December quarter of 2018, following a downwardly revised 6.0 percent expansion in the previous quarter and below market consensus of a 6.2 percent growth. Private consumption and net external contributed positively to the GDP growth while both government spending and investment slowed. Considering the whole 2018, the economy grew 6.2 percent, easing from a 6.7 percent expansion in 2017.
In the three months to December, household consumption expanded 5.4 percent year-on-year, compared to a 5.2 percent increase in the third quarter. Additionally, net external contributed positively to growth as exports rose more than imports. Exports increased by 13.2 percent, following a 13.3 percent rise in the third quarter, sales of goods went up 15.3 percent (from 15.9 percent in Q3) and those of services rose 4.5 percent (from 1.2 percent). Meantime, imports advanced at a softer 11.8 percent, following a 17.9 percent rise in the preceding quarter, driven by purchases of goods (12.4 percent from 19.7 percent) and services (10.0 percent from 8.3 percent).
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Meanwhile, gross domestic capital formation rose by 5.5 percent, easing from an 18.2 percent growth in the previous quarter. A slowdown was recorded in investment in intellectual property products (32.2 percent from 24.0 percent), followed by construction (19.3 percent from 16.4 percent), breeding stocks & orchard development (5.2 percent from 6.2 percent), and durable equipment (3.1 percent from 18.0 percent). Also, government expenditure went up 11.9 percent, slower than a 14.3 percent growth in the September quarter.
On the production side, the industry sector expanded 6.9 percent, following a 6.1 percent gain in the preceding quarter. Output rose at a faster pace in construction (21.3 percent from 18.2 percent); electricity, gas & water supply (6.6 percent from 4.7 percent) and manufacturing (3.2 percent from 3.3 percent). On the other hand, mining & quarrying jumped by 10.8 percent, after a 0.2 percent drop in the prior quarter. Also, agriculture, hunting, forestry & fishing grew 1.6 percent, after showing no growth in the previous period.
The services sector advanced 6.3 percent, slowing a 6.8 percent growth in the previous period. Output growth eased in public administration & defense, compulsory social security (12.6 percent from 17.8 percent); financial intermediation (6.0 percent from 6.9 percent); transport, storage & communication (2.7 percent from 5.4 percent); and real estate (4.4 percent from 5.5 percent). Meantime, output went up further for trade & repair of motor vehicles, motorcycles, personal & household goods (5.9 percent from 5.2 percent); other services (9.2 percent from 7.9 percent),
Considering the whole 2018, the economy expanded 6.2 percent, slowing from a 6.7 percent growth in 2017 and reaching the weakest pace in three years.
On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.6 percent, following an upwardly revised 1.5 percent expansion in the September quarter. It was the strongest quarterly growth rate since the third quarter 2017.