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Boosted by the government's stimulus plan, the Philippine gross domestic product grew in the second quarter after a contraction in the first quarter, thus effectively avoiding a recession.
Thursday, data released by the National Statistical Coordination Board showed that the Philippine gross domestic product or GDP grew a seasonally adjusted 2.4% in the second quarter, in contrast to a revised 2.1% fall in the first quarter. Economists expected a 1.5% growth. At the same time, the gross national product jumped 3% from the previous quarter.
The quarterly GDP expansion was boosted by growth in all three sectors including agriculture, fishery and forestry, as well as industry and services sectors.
The industrial sector posted a 4.5% growth in the second quarter compared to a 6.9% fall in the preceding quarter, helped by the rise in mining and quarrying and construction sectors. Agriculture and related sectors grew 1%, while the services sector showed a growth of 1.6%, higher than the 0.6% seen in the first quarter.
Compared to the previous year, the GDP climbed 1.5%, marking a slower pace compared to a 4.2% rise posted in the same period last year. But, the increase came in above economists' expectations for a 0.5% growth.
The gross national product increased 4.4%, due to increased inflow of remittances from overseas workers, but slower than a 5.3% rise in the previous year.
The yearly growth in the GDP was boosted by a rise in the construction, mining and quarrying sectors and a big jump in government services.
On the expenditure side, consumer spending rose 2.2% year-on-year, slower than a 4.1% rise in the previous year. Driven by the economic resilience plan, government expenditure was up 9.1% in comparison to a flat reading reading last year.
However, the fixed capital formation in the second quarter declined 1.9% after a 1.7% growth in the previous year, pulled down by decreased investments in durable equipment and breeding stocks.
On the external trade front, total exports fell 16.7%, the lowest since the fourth quarter of 1998, in contrast to a growth of 6.1% last year, as merchandise exports slipped 22.4%. However, exports of services climbed 15.2%. Total imports contracted 2.7%, after an almost zero figure last year.
In line with improving performance in the Philippine economy, the country's central bank ended its monetary easing that began in December last year, on August 20. In the latest monetary policy meeting, the Bangko Sentral ng Pilipinas held its key interest rate unchanged at a record low of 4%.
Moreover, in order to stimulate the economic recovery in the country, and to protect social spending and poverty reduction programs, the Asian Development Bank on August 24 approved a $500 million short-term fiscal stimulus loan, under its Countercyclical Support Facility or CSF.
Asian economies are showing signs of recovery amid the global slowdown. In the second quarter, the Japanese economy grew 3.7% and China expanded 7.9%. Economic growth was 20.7% in Singapore. Meanwhile, Hong Kong's economy emerged from the worst recession, prompting the government to raise the outlook for this year.
Data released on Wednesday showed that Malaysia's economic contraction slowed more than expected in the second quarter on higher public spending and private consumption growth.
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