Philippine economic growth quickens to 5.6pc in Q2

MANILA: Philippine economic growth quickened to 5.6 percent in the second quarter, placing the country in a better position to weather the global fallout from China's economic woes, the government said Thursday.

Boosted by higher government spending, the April to June gross domestic product (GDP) outpaced the 5.0-percent growth in the previous quarter, which was the lowest in three years, Economic Planning Secretary Arsenio Balisacan said.

Government expenditures in the second quarter rose 3.9 percent compared to 1.7 percent in first quarter. Public construction grew 20 percent, compared to a 24-percent contraction in the previous quarter, he said.

"The second quarter (growth) showed the expanse of the country's resiliency from the prevailing weakness in the global economy," Balisacan told reporters.

"Our economic fundamentals are still strong. We have to make sure we are mindful of the challenges we are facing."

Second quarter growth, however, was slower than 6.7 percent during the same period last year, data showed.

With growth averaging 5.3 percent in the first half, Balisacan said the economy could grow within a "realistic" range of 6.0 to 6.5 percent for the full year, below the government's 7.0 to 8.0-percent target.

Still, Balisacan remained optimistic, noting that the Philippines was the third fastest-growing economy in the region, behind China and Vietnam.

"We recognise it is much more important to ensure that growth momentum is sustained amid ongoing events in the global economy," he said.

"The quality and the rate of growth of the Philippine economy gives some assurance that with greater vigilance... we can withstand the volatile markets overseas."

World markets from the United States to Europe and Asia tumbled this week amid concerns that growth in China, the world's second largest economy, was slowing more than expected.

The Philippine benchmark index fell 6.7 percent last Monday, wiping out this year's record gains, but the market has since stabilised.

Philippine shares were up 110.51 points or 1.61 percent on Thursday after the GDP figures were announced.

The peso closed at 46.72 against the dollar on Wednesday, but Balisacan said the depreciation was not sharp enough to affect the economy and could increase the value of remittances from the estimated 10 million Filipinos working overseas.