Philippines: Pace of economic growth slows down to nearly three-year low in Q3
November 27, 2014
GDP expanded 5.3% in Q3 over the same period last year. The reading came in notably below the 6.4% rise recorded in Q2 and market expectations of a 6.5% expansion. In addition, the reading marked the lowest growth rate since Q4 2011, continuing the general slowdown that has been in place since Q3 2013 and that was just briefly interrupted in Q2.
Q3’s deceleration was mainly driven by a weaker performance of the external sector. Total consumption decelerated slightly, with private consumption slowing from Q2’s 5.7% annual expansion to 5.2% growth in Q3. Government consumption swung from Q2’s flat reading to a 2.6% contraction, the largest drop since Q1 2011. However, fixed investment growth picked up from Q2’s 4.5% to 10.1% in Q3.
In the external sector, exports of goods and services in Q3 expanded 9.8% over the previous year, which was down from the 10.5% increase observed in the second quarter. Imports accelerated to a 5.8% increase (Q2: +3.1% yoy). As a result, the external sector’s net contribution to overall economic growth dropped from plus 3.3 percentage points in the second quarter to plus 2.3 percentage points in the third.