Philippines: GDP growth remains strong in Q2
August 29, 2013
In the second quarter, GDP expanded 7.5% over the same period last year. The reading came in below the revised 7.7% rise observed in the first quarter (previously reported: +7.8% year-on-year) and overshot market expectations of growth slowing to 7.2%. The economic performance in Q2 was mostly underpinned by strong domestic demand, despite its moderation compared to the previous quarter.
Private consumption slowed from a 5.5% increase in the first quarter to a 5.2% rise in Q2, partially reflecting slower growth in remittances. Government consumption rose a strong 17.0% (Q1: +13.2% yoy), while fixed investment moderated to a 9.7% expansion in the second quarter (Q1: +15.6% yoy).
In the external sector, exports of goods and services contracted 6.5% in the second quarter, following the 7.6% increase observed in Q1. Imports dropped 3.0% (Q1: +2.0% yoy). Due to the improvement in exports, the external sector's net contribution to overall economic growth improved from minus 4.6 percentage points in the first quarter to minus 1.7 percentage points in the second.
The government expects growth of between 6.0% and 7.0% in 2013 and between 6.5% and 7.5% in 2014. FocusEconomics Consensus Forecast panellists expect economic growth to reach 6.6% this year, which is unchanged from last month's forecast. For 2014 panellists expect growth to slow to 6.0%.