Economy grows within government target

MANILA, Philippines - Driven by the services sector, the Philippine economy in the second quarter grew within the government's target for the year, although slower than its first-quarter expansion.

The National Statistical Coordination Board on Thursday announced that the economy grew 5.9 percent from April to June, faster than the 3.6 percent posted in the same period in 2011. With the revised 6.3-percent growth in the first quarter of the year, the economy expanded 5.9 percent in the January to June period.

The second-quarter growth of the economy is better than the respective economic performances of Malaysia, Vietnam, Singapore and Thailand, the NSCB said.

The government is targeting the boost the country's gross domestic product, the sum of all goods and services produced within the country, between five and six percent this year.

"The resilient Services sector remained the main driver of growth supported by the sustained growth of manufacturing and the rebound of construction," the NSCB said. The sector posted a growth of 7.6 percent in the quarter.

"On the demand side, growth came from positive contribution, of all the expenditure items, except for Changes in Inventories, led by consumer spending and the improved growth of external trade," the NSCB added.

Remittances from overseas Filipinos, on the other hand, pushed the gross national product to grow 5.6 percent in the quarter from 2.4 percent in the same period last year.

"For the first semester, GNI (gross national income) grew by 5.4 percent from 3.0 percent in the first semester of 2011," the NSCB said.

Government Spending

Socioeconomic Planning Secretary Arsenio Balisacan said the aggressive government spending on infrastructure projects also helped lift the economy.

"The brighter economic outlook supported by increased business confidence, strong employment creation, and accelerated government spending all contributed to the continued resurgence in economic activities from a moderate growth of 3.6 percent in the same period in 2011," Balisacan, who is also the concurrent National Economic and Development Authority director general, said.

He added that the growth is mainly owing to accelerated public investment along with a recovery in capital formation.

Meanwhile, government spending on public construction in the second quarter rose 45.7 percent year on year, while capital formation grew 2.3 percent compared to a decline of 10.5 percent in the same period last year.

"The capital formation figures strongly suggest that investment, which had been negative in previous quarters, has bottomed out,a nd that growth in capital formation is resuming," Balisacan said.