RP beats estimates, grows 1.5% in second quarter

MANILA, Philippines - The Philippine economy escaped from the threat of recession as it grew 1.5 percent in the second quarter – beating most market estimates – as the government’s stimulus package boosted spending in infrastructure and social services during the period, officials said yesterday.

Gross domestic product (GDP), the broad measure of the country’s output of goods and services, expanded 1.5 percent year-on-year in the second quarter, an improvement from the revised 0.6 percent growth in the first three months of 2009, the National Statistical Coordination Board (NSCB) said in a report.

On a seasonally adjusted basis, GDP grew 2.4 percent in the second quarter, “effectively avoiding recession” after a revised 2.1 percent contraction in the previous three months. A technical recession is judged as two consecutive quarters of negative growth.

The Philippines is one of few countries in Asia to escape recession amid the worst downturn in decades. Export-led economies such as Japan, Hong Kong, Singapore and Taiwan tumbled as demand from Western markets collapsed.

Japan, Hong Kong, Singapore and Thailand pulled out of their downturns in the second quarter but consumer demand remains weak, fueling worries about the sustainability of a global recovery.

“The economic resiliency plan of the government boosted construction consumption (growth) to 9.1 percent from zero growth in (the same period in) 2008,” NSCB chief Romulo Virola told a news conference.

National Economic and Development Authority (NEDA) acting Director General Augusto Santos said the moderate growth in the second quarter surpassed the official growth forecast of –0.1 to 0.9 percent.

“The development occurred amidst signals that the global economic recovery was underway, with some industrialized countries already exiting their respective recessions, like France and Germany,” he said in a statement.

Santos said key growth drivers were trade, business process outsourcing, construction, mining and quarrying, private and government services.

“Positive prospects are seen in new markets for agricultural products, also in medical tourism, in election spending during the next quarters, in the green industries, in renewable energy, and in the growing profit opportunities from measures concerning climate change adaptation and mitigation,” he added.

In the first semester, GDP growth registered at one percent from a year earlier.

With the positive performance in the second quarter, the Philippines should surpass an annual growth target of 0.8 – 1.8 percent this year as the government expects election-related spending to start in the second half, fuelling higher consumption, another NEDA official said. – With AP