While expansions in other countries are fading, Philippine GDP growth remains very much robust
Filipino President Benigno Aquino III reportedly loves telling anyone who will listen that the country is no longer the “sick man of Asia.” With economic growth rising by more than 7 percent again for the fourth straight quarter, the leader of the Southeast Asian nation has a point.
In the latest June quarter, gross domestic product expanded by 7.5 percent from a year earlier, following the previous quarter’s 7.7 percent gain. The rise exceeded even the 7.2 percent median estimate of economists polled by Bloomberg News.
“The Philippines remains a bright spot in Asia,” Jeff Ng, an economist at Standard Chartered in Singapore, told Bloomberg.
“While expansions in other countries are fading, Philippine GDP growth remains very much robust and we see growth persisting at above-trend levels.”
According to Bloomberg surveys, the Philippines could be among the world’s five fastest-growing economies in 2013 and 2014, likely expanding by 6.9 percent this year and 6 percent in 2014.
Filipino economic planning minister Arsenio Balisacan told reporters the country would surpass its 2013 growth target of 6 to 7 percent.
ANZ’s Eugenia Fabon Victorino described the latest GDP figure as “the strong man of Asia remains strong!” The economy posted its 16th straight quarter of growth, with private consumption gaining 6.2 percent over the previous year, government spending up 9.5 percent, but investment posting a standout 19.7 percent rise, boosted by strong construction spending.
In a research note, Victorino said the Philippine economy would expand by 7.1 percent in 2013, with domestic growth underpinned by public and private investment.
Victorino pointed to high business confidence and low debt, with outstanding credit at around a third of GDP, “the lowest in emerging Asia” and loan growth to key sectors pointing to “ample projects in the pipeline.”
The strengthening Philippine economy is even more remarkable following a regional slowdown that has seen Indonesia, Malaysia and Thailand battered by a slowing China and capital flight back to developed economies. Thailand recently entered into recession for the first time since 2009, while Indonesia posted its weakest expansion since 2010.
Comparing the nation to Asia’s “emerging tigers,” the BSP’s deputy governor Diwa Guinigundo told an ASEAN forum that “this cat is beginning to let the world hear its mighty roar”.
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