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Philippine Economy is Second-fastest in Asia, after China

The Philippines’ gross domestic product (GDP) grew by 6.4% in the January – March period, from the revised 4.9% expansion in the same period last year.

Within Asean, the Philippines’ economic performance was above the region’s average of 3.7%, growing faster than even Indonesia (6.3%), Vietnam (4%), Singapore (1.6% and Thailand (0.3%).

Growth in other Asian countries likewise was slower: India (5.3%, Hong Kong (0.4%), Republic of Korea (2.8%), and Japan (2.8%).

“But in the Philippines, the first quarter showed another strong increase. This reflects policy makers’ preparedness for anticipated weaker external demand in 2012, prompting them to boost domestic spending through fiscal and other policy measures,” the bank said.

Balisacan said the first-quarter expansion was “broad-based,” citing “services and industry sectors on the supply side and by net exports, household final consumption expenditure, and government consumption on the demand side.”

Services expanded by 8.5% in the first quarter from 3.6% in the same period last year, while the industry sector rose 4.9% and agriculture, 1%.

“It also got a big boost from manufacturing which has recovered some ground that got eroded during the third quarter and fourth quarter,” Virola said.

On the demand side, net exports – exports less imports – led growth at 5.2%, followed by consumer spending at 4.6%. Government spending, which increased 24% contributed 2.3% to overall growth in the country.

“Given the preliminary first quarter 2012 estimate, we expect that the full year 2012 real GDP growth rate projection of 5% – 6% is well within reach, or may even exceed it,” Balisacan said, adding that growth generated 1.101 million jobs throughout the country.

Balisacan said there is still more room for government spending to increase, citing the potential contribution of public-private partnership projects which are also on the rise.  But Balisacan is not the only one positive about the 2012 Philippine economy.  Barclays Research said it was increasing its growth forecast for the Philippines as well.

“Given the strong first quarter GDP print and taking into account increased risks to global growth, we are raising our 2012 GDP growth forecast to 5.5% from 4.2%,” Barclays said.

Net inflows of foreign direct investments (FDI) to the Philippines for the first two months of 2012 were $850 million, three times higher than the $335 million during the same period in 2012. Gross inflows for the first two months of 2012 were $927 million.

Author

  • Greg

    Gregory Kittelson is a co-founder of various companies in Manila, Philippines; InCorp (formerly Kittelson & Carpo Consulting), a corporate services firm, KMC Savills, a real estate services firm and KMC Solutions, Southeast Asia's largest coworking and flexible workspace company with Employer of Record (EOR) & Outsourcing Services.

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