Philippines: Economic growth accelerates in the first quarter
May 31, 2012
In the first quarter, GDP expanded 6.4% over the same period last year. The reading came in above both the 4.0% increase observed in the fourth quarter (previously reported: +3.7% year-on-year) and market expectations of a 4.3% expansion. The reading represented, in fact, the highest rate of GDP growth since the third quarter of 2010. The acceleration in economic growth in the first quarter mainly reflected a faster pace of inventory accumulation, a solid rebound in exports as well as higher government spending. Private consumption expanded 6.6% in the first quarter of the year (Q4 2011: +6.4% yoy), while government consumption surged 24.0% in the first quarter, up from the 7.6% increase registered in the fourth. Moreover, fixed investment rebounded from a 2.4% contraction in the fourth quarter to a 2.8% increase in the first. Exports of goods and services rebounded strongly from an 8.2% decline in the fourth quarter to a 7.9% increase in the first. Simultaneously, imports fell 2.6% in the first quarter (Q4 2011: -6.2% yoy). As a result, the external sector's net contribution to overall economic growth swung from minus 1.5 percentage points in the fourth quarter to plus 5.4 percentage points in the first. The government expects growth of between 5.0% and 6.0% in 2012.