- State spending surged 17.4% y/y, consumer spending up 6.4%
- World Bank sees economic growth of more than 6% until 2018
Philippine growth quickened to the fastest pace in a year after the government took steps to accelerate disbursements and as consumer spending strengthened. Stocks pared losses.
Gross domestic product increased 6.3 percent in the three months through December from a year earlier, Philippine Statistics Authority said in Manila Thursday. That compares with a median estimate of 5.9 percent in a Bloomberg survey of 17 analysts, and a 6.1 percent pace in the third quarter. The economy expanded 5.8 percent in 2015.
"In Asia, we expect the Philippines to be among those who will outperform this year," said Eugenia Victorino, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. "The domestic economy is providing a healthy buffer against the global trade recession we are seeing and election spending will help keep growth robust."
President Benigno Aquino, whose term ends in June, is stepping up efforts to unlock bottlenecks in state spending and lure investment. That’s helping shield the nation amid an entrenched China slowdown that’s hurt other emerging nations. The World Bank forecast the economy will expand more than 6 percent this year and through 2018, to remain among the fastest in the world.
Stocks pared losses to 0.2 percent as of 11:07 a.m. in Manila, after falling as much as 0.9 percent earlier. The peso dropped 0.1 percent.
A 7 percent growth rate is achievable this year, outgoing Economic Planning Secretary Arsenio Balisacan said at a briefing Thursday.
The Philippines has strong fiscal space and can continue to invest in infrastructure, Finance Secretary Cesar Purisima said in an interview with Bloomberg Television. The nation is well-positioned to withstand turbulence caused by uncertainty in the global landscape, he said in a separate statement.
Aquino is increasing spending to a record this year. The central bank sees no need to adjust policy settings at the moment, Governor Amando Tetangco said after the report. Exports contracted in nine of 11 months last year.
“Growth is strong, driven by domestic consumption and an acceleration in the government’s infrastructure spending,” Jeff Ng, a Singapore-based economist at Standard Chartered Plc, said before the report. “There will be some external headwinds this year, but the Philippines will still outperform due to its strong domestic drivers.”