Philippine economy grew 5.6 pct in the second quarter, slightly below

The first quarter growth is lower than the 5.6% gross domestic product (GDP) rate in the same period past year, and down from 6.6% in the fourth quarter of 2014. This brought the first half expansion to 5.3%.

World markets from the United States to Europe and Asia tumbled this week amid concerns that growth in China, the world’s second largest economy, was slowing more than expected.

In the second quarter, economic growth in the Philippines rebounded to 5.6% from a three-year low of 5% in the first quarter.

Arsenio Balisacan said today. Industry rose 6.1 percent while investment grew 8.9 percent. Public construction grew 20 percent, compared to a 24-percent contraction in the previous quarter, he said.

He said Philippine growth is the third fastest in the region, showing “resilience” against global events such as China’s economic slowdown and its effect on financial markets.

Gross National Income expanded 5.0 percent on year.

“The government stepped up spending and private consumption also remains fairly strong”, Gundy Cahyadi, Singapore-based economist at DBS Group Holdings Ltd, said before the report. The significant improvement in government spending “gives us more confidence about the performance of the public sector in the coming quarters of the year”.

“Another challenge is in improving the ability of government in responding to and recovering from disasters arising from natural hazards. We recently pushed back our rate hike forecast to Q3 2016, which would be after the presidential election in May 2016”, added Barclays.

The peso gained 0.1% to 46.665 against the US dollar at 9.50am Bangkok time. However, he said that its overall net affect is still positive for the economy, especially for workers, as long as the depreciation is not sharp.