Philippine first quarter growth slower than expected

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Manila OrtigasThe Philippine economy grew by 5.7 per cent in the first quarter, much slower than market expectations, as it continued to feel the lingering effects of super typhoon Yolanda.

GDP rose 5.7 per cent in the first three months of the year, much lower than the 6.4 per cent median estimate of 20 analysts polled by Reuters. The pace of growth was also slower than the 6.3 per cent year-on-year growth in the fourth quarter of 2013, and the annual 7.7 per cent growth in the first quarter of 2013.

Despite the slowdown, Socio Economic Planning Secretary Arsenio Balisacan said the Philippines remains the third fastest growing economy in Asia in the first quarter, next only to China with 7.4 per cent and Malaysia with 6.2 per cent.

“The relatively slow growth is expected, given the magnitude of the destruction in production capacity. In agriculture, permanent crops, notably coconuts, were felled. Damage to agricultural output also disrupted supply chains, which may partly explain why food manufacturing output also declined. The tourism and insurance industries likewise slowed down in the first quarter as they are still reeling from the impact of natural calamities last year,” Balisacan said.

He was referring to the damage caused by the earthquake in Bohol and Yolanda in central Visayas. The impact of Yolanda on agricultural output had offset the strong growth of the services and industry sectors.

National Statistician Lisa Bersales said the first quarter growth was driven by the services sector, which grew by 6.1 per cent, and by the industry sector, which grew by 5.5 per cent.

Balisacan said there was urgency to speed up the government’s typhoon rehabilitation efforts.

“Reconstruction efforts will rebuild assets and restore supply chains. At the same time, we need to strengthen the capacity of people, families and communities to participate in the growth process once again,” he said, adding that he was still confident full-year growth will meet government’s target of 6.5 to 7.5 per cent.

“Growth in the first quarter of 2014 indicates that the economy will continue to grow at an increasing pace in the succeeding three quarters. The growth momentum will likely strengthen within the near-term, notwithstanding the risk and challenges that the economy is facing. We remain confident that we will meet the growth target of 6.5 to 7.5 per cent for the full year of 2014,” he said.

Last year, the Philippine economy grew by 7.2 per cent, the fastest growth rate in Southeast Asia.

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Reading Time: 2 minutes

The Philippine economy grew by 5.7 per cent in the first quarter, much slower than market expectations, as it continued to feel the lingering effects of super typhoon Yolanda.

Reading Time: 2 minutes

Manila OrtigasThe Philippine economy grew by 5.7 per cent in the first quarter, much slower than market expectations, as it continued to feel the lingering effects of super typhoon Yolanda.

GDP rose 5.7 per cent in the first three months of the year, much lower than the 6.4 per cent median estimate of 20 analysts polled by Reuters. The pace of growth was also slower than the 6.3 per cent year-on-year growth in the fourth quarter of 2013, and the annual 7.7 per cent growth in the first quarter of 2013.

Despite the slowdown, Socio Economic Planning Secretary Arsenio Balisacan said the Philippines remains the third fastest growing economy in Asia in the first quarter, next only to China with 7.4 per cent and Malaysia with 6.2 per cent.

“The relatively slow growth is expected, given the magnitude of the destruction in production capacity. In agriculture, permanent crops, notably coconuts, were felled. Damage to agricultural output also disrupted supply chains, which may partly explain why food manufacturing output also declined. The tourism and insurance industries likewise slowed down in the first quarter as they are still reeling from the impact of natural calamities last year,” Balisacan said.

He was referring to the damage caused by the earthquake in Bohol and Yolanda in central Visayas. The impact of Yolanda on agricultural output had offset the strong growth of the services and industry sectors.

National Statistician Lisa Bersales said the first quarter growth was driven by the services sector, which grew by 6.1 per cent, and by the industry sector, which grew by 5.5 per cent.

Balisacan said there was urgency to speed up the government’s typhoon rehabilitation efforts.

“Reconstruction efforts will rebuild assets and restore supply chains. At the same time, we need to strengthen the capacity of people, families and communities to participate in the growth process once again,” he said, adding that he was still confident full-year growth will meet government’s target of 6.5 to 7.5 per cent.

“Growth in the first quarter of 2014 indicates that the economy will continue to grow at an increasing pace in the succeeding three quarters. The growth momentum will likely strengthen within the near-term, notwithstanding the risk and challenges that the economy is facing. We remain confident that we will meet the growth target of 6.5 to 7.5 per cent for the full year of 2014,” he said.

Last year, the Philippine economy grew by 7.2 per cent, the fastest growth rate in Southeast Asia.

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