The Philippine economy grew faster than economists estimated last quarter as manufacturing rose, in a boost to President Benigno Aquino’s goal of luring more investment to create jobs. The peso rose.
Gross domestic product increased 6.4 percent in the three months through June from a year earlier, the Philippine Statistics Authority said in Manila today, after rising 5.6 percent in the previous quarter. The median estimate of 22 economists in a Bloomberg survey was 6.1 percent.
A rebound in manufacturing and exports are aiding Aquino’s efforts to transform the nation into one of Asia’s fastest growing economies as he aims for as much as 7.5 percent annual expansion this year. Bangko Sentral ng Pilipinas raised the benchmark interest rate last month to contain inflation running at a three-year high.
“The bounceback clearly highlights the resiliency of the Philippine economy and the structural changes that make possible this higher-trend growth,” said Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG. “But the question of whether this can last beyond the current government is a crucial question a lot of investors think about.”
The peso rose 0.1 percent to 43.63 against the U.S. dollar as of 10:47 a.m. in Manila, according to Tullett Prebon Plc. The benchmark stock index slipped 0.6 percent, snapping six days of gains.
Aquino, whose term ends in June 2016, is seeking to ensure his efforts to overhaul the economy will last beyond the single six-year term he’s allowed by law. In an interview with local news channel TV5 earlier this month, the president said he may consider seeking changes to the constitution to curtail judicial powers and let him seek another term.
Aquino will seek more trade and investment during his trips to Germany, France and Spain in September, he said in a radio interview aired today before the GDP report.
There is “a strong likelihood of achieving the full-year growth target of 6.5 percent to 7.5 percent,” Economic Planning Secretary Arsenio Balisacan said at a briefing today. “However, we are aware that market players are still looking for more positive signals, in particular the public sector’s key role in infrastructure spending and consumption of non-durables.”
Consumer prices rose 4.9 percent in July from a year earlier, the fastest pace since October 2011. Inflation has more than doubled in less than a year after November’s Super Typhoon Haiyan damaged crops and an expanded truck ban in Manila from February delayed shipments.
Bangko Sentral raised the benchmark rate to 3.75 percent in July from a record-low. It had earlier increased the rate on special deposit accounts, and has raised the reserve requirement ratio twice this year.
The economy grew 1.9 percent last quarter from the previous three-month period, the fastest pace in five quarters. Manufacturing rose 10.8 percent from a year earlier, while consumer spending gained 5.3 percent, today’s report showed.