Upbeat No. 24.09.14 nn No. 2117 10.30.2008
PHL, 2nd fastest growing economy in Asia in Q2 The Philippine economy grew at its fastest pace in more than a year in the second quarter as one of the robust economy in Asia second to China. The Southeast Asian economy remains a popular investment destination due to relatively strong economic fundamentals, a stable political environment, and improved credit ratings. Standard & Poor’s (S&P) raised the country’s longterm credit ratings in May to two notches above investment grade.
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The economy, after a slow start to the year, grew a seasonally adjusted 1.9% against the upwardly revised 1.4% in the March quarter, the fastest pace in five quarters.
Growth accelerated to 6.4% in the second quarter on strong manufacturing and exports on a year-on-year basis. The outcome beat market forecast of 6.2%, putting the country on track to meet its full-year gross domestic product (GDP) target of 6.55% to 7.5%. Philippines’ Socioeconomic Planning Secretary Arsenio M. Balisacan said that for the economy to hit the low end of the government’s target this year, growth should average at least 6.9% in the second half. First-half GDP was at 6.0%. The latest data bolsters expectations the Bangko Sentral ng Pilipinas (BSP) will follow up on July’s rate hike to stay on top of rising prices. With the strong growth, the BSP can focus on taming inflationary pressures. Inflation has averaged 4.3% in the seven months to July, above BSP’s 3% to 5% goal this year and outside next year’s 2% to 4% inflation target. Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri Jr. said he expects food prices to remain elevated after Manila rejected bids on the tender for fresh rice supply. The peso rose to its strongest in more than three weeks on expectations of a further rate hike after the GDP data. n