The economy expanded by 6.4 percent in the second quarter, matching that of Malaysia as the second fastest in Asia next to China, the Philippine Statistics Authority (PSA) said on Thursday.
The second quarter output compares with 5.6 percent in the first quarter and 7.9 percent a year earlier.
“We remain as one of the bright prospects in the region, the second fastest growing economy in Asian countries, tied with Malaysia’s performance,” Socioeconomic Secretary Arsenio Balisacan said in a briefing in Makati City Thursday.
The second quarter gross domestic product (GDP) was driven by the industry sector followed by the services and agricultural sectors, interim Deputy National Statistician Romeo Recide said in the same briefing.
Services made the highest contribution at 3.5 percent, the industry at 2.5 percent and agriculture at 0.3 percent, Recide said.
In a separate statement, Finance Secretary Cesar Purisima said the second quarter GDP growth demonstrates the increasing resiliency and diversity of the Philippine economy with varied sectors of the economy leading our growth.
“This is positive news for our country as the second quarter figure shows the potential of the Philippines to sustain inclusive economic development as new sectors of the economy begin to pick up speed. But, we can do better,” he said.
“We are confident the fundamentals of rapid growth are in place and some adjustments in government disbursements will bring growth to a higher path,” he added.
Bank of the Philippine Islands lead economist Emilio Neri Jr. said the second quarter GDP was a surprise – given that the consensus was 6.1 percent – and would bode well for the economy.
“We might see another upgrade from ratings agency Moody’s as the second quarter output was better than its projection,” he said.
Debt watcher Moody’s Investor Service projected a 6.2 percent growth in the second quarter on expectations of higher manufacturing output and strong exports.
The GDP results also gives Bangko Sentral ng Pilipinas more leeway in adjusting monetary policy, Neri said. “The BSP will be more confident to raise rates as the economy is getting better.”
On the contrary, Philippine Chamber of Commerce and lndustry (PCCI) President Alfredo M. Yao said the second quarter data was as expected. “First quarter is normally slow then GDP will go up in the second quarter.”
Port congestion presents a hitch
Without the Manila port congestion, the economic output would have accelerated faster, he said.
“What the issue needs is political will from the Aquino administration. With this issue, the Philippines would have to strike a little more in the third and fourth quarter to meet targets,” Yao noted.
National Competitiveness Council co-chair Guillermo Luz also emphasized the need to push the agriculture sector to perform better.
“It’s good that the sector rebounded, but it has to be done consistently over many quarters to see its real improvement,” he said.
The second quarter GDP was short of government’s 6.5 to 7.5 percent goal for the year.
Output in the first quarter was, however, revised downward from 5.7 percent due to lowered contribution from transportation, storage, and communication, mining and quarrying, and financial intermediation, amid lingering effects of Typhoon Yolanda late last year.
But investors on the Philippine Stock Exchange took the second quarter GDP as a cause of concern, noting it was slower than the 7.9 percent recorded a year earlier.
In a daily commentary, DA Market Securities Inc. said a GDP result below 5.7 percent will be considered weak, a result between 5.7 to 6 percent will show improvement but maintains concerns of a slowing economy while an above 6 percent will be considered strong.
However, the market is vulnerable to profit-taking in its quest to breach key resistance levels, it said. — JDS, GMA News
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