Philippines: Economic growth slows in the second quarter
August 30, 2012
In the second quarter, GDP expanded 5.9% over the same period last year. The reading came in below the 6.3% increase observed in the first quarter (previously reported: +6.4% year-on-year) but above market expectations of a 5.5% expansion. The deceleration in economic growth in the second quarter mainly reflected a decline in inventories, a deceleration in government spending as well as a lower contribution to growth from trade. Private consumption accelerated from a 5.1% increase in the first quarter to a 5.7% rise in the second, while government consumption, on the other hand, decelerated from a hefty 20.9% rise in the first quarter to a 5.9% expansion in the second. Meanwhile, fixed investment expanded 8.5% in the second quarter, well above the 3.9% expansion observed in Q1. Exports of goods and services slowed from a 10.9% increase in the first quarter to an 8.3% expansion in the second. Simultaneously, imports rebounded from a 3.2% contraction in the first quarter to a 4.4% rise in the second. As a result, the external sector's net contribution to overall economic growth fell from 7.2 percentage points in the first quarter to 1.9 percentage points in the second. The government expects growth of between 5.0% and 6.0% in 2012.