The Philippines economy advanced 5.6 percent year-on-year in the first quarter of 2019, easing from an upwardly revised 6.3 percent expansion in the previous quarter and below market consensus of 6.1 percent. It was the weakest growth rate since the first quarter 2015, as government spending and fixed investment slowed, and net external contributed negatively to the GDP.
In the three months to March, government expenditure went up 7.4 percent, slower than a 12.6 percent expansion in the last quarter of 2018. Also, fixed capital formation rose 5.7 percent, following a 8.5 percent growth mainly due to a slowdown in construction (5.0 percent from 17.6 percent); intellectual property products (13.8 percent from 26.2 percent); and breeding stocks & orchard development (3.8 percent from 5.2 percent). Additionally, net external contributed negatively to GDP growth as exports rose less than imports. Exports increased by 5.8 percent (vs 14.4 percent in Q4), of which sales of goods (6.1 percent) and services (4.9 percent); and imports advanced 8.3 percent (vs 12.4 percent), namely purchases of goods (8.6 percent) and services (6.8 percent).
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On the other hand, household consumption expanded 6.3 percent year-on-year, faster than a 5.3 percent increase in the fourth quarter of 2018.
On the production side, the industry sector grew 4.4 percent, slowing from a 6.6 percent gain in the preceding quarter. Output rose at a softer pace in construction (3.9 percent from 20.0 percent); electricity, gas & water supply (3.1 percent from 6.7 percent); and mining & quarrying (5.3 percent from 8.1 percent) while manufacturing advanced further (4.6 percent from 3.1 percent). Also, agriculture, hunting, forestry & fishing expanded 0.8 percent, after increasing by 1.8 percent in the previous period.
Meanwhile, the services sector advanced 7.0 percent, accelerating from a 6.8 percent growth in the previous period. Output increased at a faster pace in financial intermediation (9.8 percent from 6.3 percent); transport, storage & communication (8.1 percent from 3.7 percent); trade & repair of motor vehicles, motorcycles, personal & household goods (7.4 percent from 6.7 percent). In contrast, growth slowed for public administration & defense, compulsory social security (9.7 percent from 14.7 percent); and other services (5.7 percent from 9.4 percent), while real estate was steady (at 4.1 percent).
On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.0 percent, following an upwardly revised 1.8 percent expansion in the December quarter. It was the weakest quarterly growth rate since the third quarter 2014.