Government spending on construction helped boost the Philippine economy, a senior official said Thursday, as data showed it grew 1.5% year on year in the second quarter.
Although the figure was down on the 4.2% growth recorded at the same period last year, it is an improvement on the revised 0.6% seen in the previous three months.
In the first six months, the economy expanded 1% year on year, well below the 3.8% seen in the first half of 2008.
“The economic resiliency plan of the government boosted construction consumption (growth) to 9.1% from zero growth in (the same period in) 2008,” National Statistical Coordination Board chief Romulo Virola told a news conference.
On a seasonally adjusted basis, gross domestic product (GDP) grew 2.4% in the second quarter, “effectively avoiding recession” after a revised 2.1% contraction in the first 3 months. A technical recession is judged as 2 consecutive quarters of negative growth.
However with the population growing to an estimated 92 million, the per capita GDP fell 0.5% to about $937, Virola said.
Election spending boost
The Philippines should surpass an annual growth target of 0.8% to 1.8% this year as the government expects election-related spending to start in the second half, fuelling higher consumption, a senior economic official also said on Thursday.
“It’s easy to breach,” Dennis Arroyo, head of policy planning at the socio-economic planning agency, told reporters when asked if the growth goal was achievable.
“To breach the 1.8%, you have to grow 2.6% in the next semester, which seems easy,” he said.
Arroyo also said annual growth in the third quarter could be better than in the second quarter, with inflation seen decelerating further in August.
The government earlier said the economy grew an annual 1.5% in the second quarter and an annual 1% in the first half of the year.
Stronger-than-expected growth in the Philippines in the second quarter showed the central bank’s decision to end an interest rate easing cycle was correct and could set the stage for a shift in monetary policy, a senior central bank official said on Thursday.
“This clearly shows stronger signs of economic recovery,” central bank deputy governor Diwa Guinigundo said in a mobile phone text message after the government announced second quarter growth of 1.5% year-on-year.
“The recent decision to pause was correct, from which perspective, a possible shift in monetary policy may be decided.”