Economy slows down to 5.6% in Q2

MANILA, Philippines (UPDATED 12:05 p.m.) - The Philippine economy grew by  5.6 percent for the second quarter of this year, the Philippine Statistics Authority said on Thursday.

The expansion slowed down from 6.7-percent growth rate in the same period last year.

National Economic Development Authority Director General Arsenio Balisacan said the current gross domestic product (GDP) is slightly below the government's target but assured that the growth momentum will be sustained.

"As one of the countries with a respectable growth compared to other emerging Asian economies, the Philippines remains an attractive market and investment destination. Our economic fundamentals are still strong," Balisacan said.

The second quarter GDP, however, is an improvement from the previous quarter's 5 percent.

"The Philippine Statistics Authority’s report also indicates sustained strong performance of the private sector. Importantly, the second quarter GDP growth shows the expanse of the country’s resiliency from the prevailing weakness of the global economy," Balisacan said.

Government final consumption expenditure grew to 3.9 percent from 1.7 percent in the previous quarter.

Public construction also improved from a 24-percent contraction last quarter to a 20-percent growth, Balisacan said.

"This is a result of government’s efforts to address issues on spending bottlenecks, especially for public infrastructure, which held back growth in the first quarter," the NEDA official said.

Meanwhile, the private sector maintained its strength as capital formation grew from 17.4 percent as opposed to the 8.6 growth in the same period last year.

Exports grew from 5.9 percent in the same period last year to 31.3 percent in the second quarter this year.

Balisacan noted that this improvement dispels doubts in service-oriented industries such as the business process outsourcing sector.

Imports also grew to 12.7 percent this quarter from the 4.9 percent growth in the same period last year.

"It is likewise notable that imports of services gained a double-digit growth of 26.3 percent from 9.8 percent in the second quarter of 2014," Balisacan added.

The NEDA official concluded that the second quarter GDP shows that the country is still on the "right track" in achieving its development goals outlined in the Philippine Development Plan 2011-2016.