Philippines GDP Growth Weakest Since Late 2011


The Philippines economy expanded 5.2 percent in the first quarter of 2015, slowing from a revised 6.6 percent growth in October to December and missing market forecasts. An increase in private consumption and a rebound in investment were unable to offset a slowdown in government expenditure and exports.

On the expenditure side, household consumption grew by 5.4 percent year-on-year, accelerating from a 5.1 percent  increase in the fourth quarter 2014. Government expenditure expanded by 4.8 percent, as compared to a 9.8 percent growth in the  preceding quarter, mainly due to slower cash disbursement of major government expenditures and other operating expenses.
 
Gross domestic capital formation increased by 11.8 percent, reversing from a 4.9 percent decline in the previous quarter, as investments in durable equipment expanded by 14.3 percent year-on-year while investment in construction grew by 5.7 percent and intellectual property products increased by 14.8 percent.
 
Exports expanded 1.0 percent, markedly slowing from a 15.5 percent increase in the previous quarter, mainly due to lower sales of goods and services. Outward shipments of goods significantly declined for: automotive electronics (-53.7 percent), control instrumentation (-44.7 percent), electronic data processing (-8.3 percent), petroleum products (-28.2 percent), metal components (-8.2 percent), sugar (-78.3 percent), bananas (-64.1 percent), copra oil cake or meal (-63.4 percent), dessicated coconut (-13.8 percent), shrimps and prawns (-47.6 percent) and tuna (-50.0 percent).
 
Imports increased by 4.6 percent, following a 5.3 percent growth in the fourth quarter, mainly driven by slower purchases of goods (+2.5 percent from +15.9 percent in the previous quarter) and services (+11.9 percent from +10.8 percent). Among goods, imports of feedstuff fell the most by 38.2 percent, followed by dairy products (-37.2 percent) and transport equipment (-32.5 percent). Among services, insurance rose the most by 24.6 percent, transportation (+21.1 percent), miscellaneous services (+14.0 percent), travel (+8.2 percent) and government (+5.9 percent).
 
On the production side, the services sector advanced 5.6 percent year-on-year, slowing from a 6.0 percent growth in the previous quarter. Growth in the sector were contributed by: transportation, storage and communication (+8.6 percent from +6.3 percent in the previous quarter);  trade and repair of motor vehicles, motorcycles, personal and household goods (+5.4 percent from +5.3 percent); financial intermediation (+ 4.3 percent from 6.6 percent); real estate, renting & business activity (+6.4 percent from +8.3 percent) and public administration & defense compulsory social security (+0.2 percent from + 10.9 percent).
 
The industry sector grew by 5.5  percent, slowing from a 9.2 percent expansion in the preceding quarter. Growth of the sub-sectors mostly slowed except mining & quarrying: construction expanded by 4.5 percent (from +25.0 percent in the previous quarter); manufacturing (+5.9 percent from +10.7 percent); electricity, gas and water supply (+4.1 percent from +5.5 percent). In contrast, mining & quarrying grew by 7.1 percent, reversing from a by 3.2 percent decline in the fourth quarter.
 
The agriculture, hunting, forestry and fishing (AHFF) expanded by 1.6 percent, slowing from a 4.7 percent growth in the December quarter. The top contributors to the growth in the agriculture were: corn (+4.0 percent), banana (+4.0 percent), cassava (+9.2 percent), livestock (+3.1 percent), poultry (+4.7 percent) and palay (+1.4 percent). In contrast, contraction in the AHFF sector were seen for: rubber (-21.6 percent), coffee (-12.1 perccent), mango (-7.5 percent) and sugarcane (-2.9 percent), forestry (-3.9 percent) and fishing (-2.6 percent).
 
On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 0.3 percent in the first quarter of 2015, slowing from a 2.5 percent expansion in the December quarter, mainly due to a contraction in the industry and agriculture sector.

Philippines GDP Growth Weakest Since Late 2011


National Statistics Coordination Board l Rida Husna l rida@tradingeconomics.com
5/28/2015 12:07:28 PM