PH surprises with 7.8% growth in Q1
MANILA, Philippines (3rd UPDATE) - Defying economists' expectations, the Philippine economy grew 7.8% in the first quarter of 2013, the highest since President Benigno Aquino III took office in 2010.
In a press briefing on Thursday, May 30, National Statistical Coordination Board Secretary-General Jose Ramon Albert said the surprisingly high gross domestic product (GDP) growth was driven mainly by the strong expansion of the manufacturing and construction sectors.
He said robust household and government spending also helped.
The figure was better than the government's 6% to 7% target -- also the goal for full-year 2013 -- and faster than the revised 7.1% bounce recorded in the previous quarter, and the 6.8% climb in 2012.
Compared to neighbors, the Philippines also performed better.
Socioeconomic Planning Secretary Arsenio Balisacan said the country's growth was the highest in East and Southeast Asia, particularly China's 7.7%, Indonesia's 6%, Thailand's 5.3%, and Vietnam's 4.9%. (Editor's note: We earlier reported that Vietnam's growth was 5.9%. We regret the error.)
The Philippines' stellar performance was largely due to services, which posted a growth of 7%. This sector contributed 3.9 percentage points to GDP growth.
The services sector was fueled by financial intermediation, which posted a growth of 13.9% and contributed 1.7 percentage points to the sector's expansion.
On the expenditure side, Albert said household consumption was still the main driver, contributing 3.6 percentage points to GDP growth.
Data showed, however, that household consumption was only the second-fastest growing, at 13.2%. Construction grew the highest at 33.7%.
Construction was also a big contributor to industry sector growth of 32.7%. Manufacturing also gave a boost as it grew 9.7%.
"Our economy is diversifying. It's moving away increasingly from its heavy dependence on personal consumption," Balisacan said.
The first-quarter number handily beat the forecasts of economists, many of whom projected growth to have slowed down to around 6%.
The economists cited weak trade and slowing overseas remittance inflows as some of the factors that could have pulled down growth.
The National Statistics Office said the country's export earnings reached $12.08 billion in the first quarter, down 6.2% from the $12.9 billion level a year ago, because of slow demand from trading partners. Imports, an indicator of how the export industry would perform, posted a bigger decline of 7.4% to $14.4 billion from $15.5 billion in the first quarter of 2012.
Remittances from Filipinos based abroad, in the meantime, rose only 3.7% in March, easing from the 6% to 7% level in the previous years. For the first quarter, remittances grew 5.58% to $5.1 billion year on year.
Jobs still lacking
Despite the Philippines' high economic growth, creating jobs remains to be a challenge with millions entering the labor force each year.
Data from the National Statistics Office showed the country's jobless rate hardly changed to 7.1% in January 2013 from 7.2% in the same period in 2012.
There were 2.89 million Filipinos without work in January, more than the 2.76 million recorded in October. Filipinos who were underemployed or those seeking additional hours of work also rose to 7.93 million from 7.16 million.
The number of jobs isn't the only problem, said Balisacan. The Philippines has a long way to go in terms of providing high-quality work.
With the bleak jobs picture, Balisacan said poverty incidence in the country hasn't improved.
In the first semester of 2012, poverty incidence in the Philippines stood at 27.9%, virtually unchanged from previous years. Poverty incidence in the same period in 2009 was 28.6%, and in 2006, 28.8%. - with reports from Cai Ordinario and Lala Rimando/Rappler.com