Philippines GDP Growth Slowest In 1-1/2 Years In Q1
The Philippines economy grew an annual 6.4 percent in the March quarter of 2017, following a 6.6 percent expansion in the previous quarter and below market consensus of a 6.8 percent growth. It was the weakest expansion since the third quarter 2015, as private consumption, investment, and government spending slowed while exports rose further.
In the three months to March, household consumption expanded 5.7 percent year-on-year, compared to a 6.3 percent increase in the fourth quarter. Government expenditure edged up 0.2 percent, slower than a 4.0 percent growth in the December quarter, due to a decline in maintenance and other operating expenditures of government agencies. Delays in the implementation and procurement of various government programs and higher expenses recorded during the election period in 2016 also contributed to a growth government spending.
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Gross domestic capital formation increased by 7.9 percent, slowing from a 14.7 percent growth in the previous quarter, and marking for the first time one digit growth after the seven straight quarters of double-digit gains. Investment in construction grew by 9.9 percent, followed by durable equipment (12.5 percent), breeding stocks & orchard development:(3.1 percent) and intellectual property products (27.2 percent).
Exports increased by 20.3 percent, faster than a 13.4 percent rise in the fourth quarter. Sales of goods rose 22.3 percent (from 9.6 percent in the fourth quarter), those of services went up 14.3 percent (from 13.6 percent). Imports increased by 17.5 percent, following a 15.4 percent in the preceding quarter.
On the production side, the services sector advanced 6.8 percent, compared to a 7.2 percent growth in the three months to December. Growth in the sector was supported by public administration & defense; compulsory social security (5.5 percent), real estate (6.9 percent), trade and repair of motor vehicles, motorcycles, personal and household goods (7.1 percent), other services (7.6 percent), transport, storage & communication (4.9 percent) and financial intermediation (7.4 percent). The industry sector expanded 6.1 percent, following a 7.9 percent growth in the preceding quarter. Construction recorded the highest increase (8.2 percent), followed by electricity, gas and water supply (1.4 percent) and manufacturing (7.5 percent). In contrast, mining & quarrying shrank by 20 percent, following a 0.5 percent fall in the December quarter. Agriculture, hunting, forestry and fishing rebounded (4.9 percent following a 1.1 percent contraction in the previous period).
For full year 2017, the World Bank expects growth to reach 6.9 percent, well inside the Philippines government 6.5 - 7.5 percent target and faster than 6.8 percent in 2016.
On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.1 percent, compared to an upwardly revised 1.8 percent growth in the December quarter while markets estimated a 1.5 percent growth.