Philippines: Economic growth slows significantly in Q1 on subdued exports
May 27, 2015
GDP expanded 5.2% in Q1 over the same period of the previous year. The reading came in notably below the strong 6.6% rise recorded in Q4 2014 and undershot market expectations of a 6.6% expansion. In addition, the reading marked the slowest growth rate since Q4 2011.
Q1’s deceleration was mainly driven by a deterioration of the external sector. Total consumption remained broadly unchanged, with private consumption picking up from Q4’s 5.0% expansion to a 5.4% rise in Q1. Conversely, government consumption slowed from Q4’s 9.4% expansion to a 4.8% increase in Q1. Fixed investment sped up to a 10.1% expansion in Q1 (Q4: +8.0% year-on-year).
In the external sector, exports of goods and services in Q1 expanded a lackluster 1.0% over the previous year, which was notably down from the 12.8% increase observed in the fourth quarter and marked the lowest gains since Q2 2013. Imports decelerated to a 4.6% increase (Q4: +9.9% yoy). As a result, the external sector’s net contribution to overall economic growth deteriorated, swinging from plus 2.0 percentage points in the fourth quarter to minus 1.7 percentage points in the first quarter of this year.