Philippines Q4 GDP Growth Slightly Below Estimates
The Philippines economy grew an annual 6.6 percent year-on-year in the December quarter of 2017, following an upwardly revised 7 percent expansion in the previous quarter and below market consensus of a 6.7 percent growth. It was the weakest growth since the first quarter 2017, as investment rose at a slower pace while government spending, private consumption, and exports continued to increase.
In the three months to December, gross domestic capital formation increased by 8.2 percent, slowing from a 8.7 percent growth in the previous quarter and marking the third straight quarter of single digit growth after eight quarters of double-digit gains. Investment in intellectual property products grew by 35.3 percent, followed by durable equipment (12.1 percent); construction (2.9 percent), and breeding stocks & orchard development (2.5 percent).
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Government expenditure rose 14.3 percent, faster than a 8.3 percent growth in the September quarter amid the release of year-end bonus and cash gift of government employees, the release of performance-based bonus of some agencies, and the filling up of government positions. Household consumption expanded 6.1 percent year-on-year, compared to a 5.3 percent increase in the third quarter.
Exports increased by 18.6 percent, following a 17.7 percent rise in the third quarter. Sales of goods rose 20.2 percent (from 17.2 percent in the third quarter) and those of services went up 12.6 percent (from 19.9 percent). Imports rose by 17.5 percent, following a 15.8 percent rise in the preceding quarter.
On the production side, the services sector advanced 6.8 percent, compared to a 7.2 percent growth in the three months to September. Growth in the sector was supported by public administration & defense, compulsory social security (8.7 percent); trade and repair of motor vehicles, motorcycles, personal and household goods (7.9 percent); real estate (6.6 percent); other services (6.1 percent); financial intermediation (5.9 percent), and transport, storage & communication (5.4 percent). The industry sector expanded 7.3 percent, following a 7.9 percent growth in the preceding quarter. Mining & quarrying went up by 8.8 percent, following a 6.1 percent rise in the September quarter. Manufacturing grew (8.8 percent), followed by electricity, gas and water supply (5.1percent), and construction (2.8 percent). Agriculture, hunting, forestry and fishing rose 2.4 percent following a 2.6 percent expansion in the previous period.
The Philippines had a 6.5-7.5 percent growth target in 2017 year and aims at 7.0-8.0 percent this year. Over the next 6 years, the government is targeting GDP growth within a 7 percent to 8 percent range annually.
On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.5 percent, compared to an upwardly revised 1.7 percent growth in the September quarter and below market consensus of 1.8 percent.