RP 2Q GDP grows by 7.9%; widest since 2007

(Updated 1:37 p.m.) The Philippine economy expanded by 7.9 percent in the second quarter – or the last three months of the Arroyo administration – reflecting the widest quarterly growth since the second quarter of 2007, and compares with the 1.2 percent growth in the second quarter of 2009. The relatively peaceful turnout of the May elections, improved investor confidence, the global economic recovery, and increased capital expenditure by government helped grow the economy as measured by the gross domestic product, the National Statistical Coordination Board said Thursday. GDP is the amount of goods and services produced by the country, or its economic performance. "The increased consumer and government spending, increased investments in construction and durable equipment, and the second consecutive quarter of immense growth in external trade also contributed to [the second quarter] growth," Virola said. "With continued disbursement for ongoing projects, increased provision for pro-poor programs and the additional requirements of the 2010 national automated elections, government consumption expenditure grew, albeit at a slower pace, by 5.6 from 11.9 percent," Virola said. Investments in fixed capital formation in the second quarter of 2010 rebounded to 25.5 percent from negative 0.3 percent in the same period last year, buoyed by increased investments in durable equipment and construction, the NSCB said. Public construction, Virola said, maintained its double-digit growth of 28.7 percent from 39.1 percent in the same comparable period due to the "carry-over disbursement for typhoon Ondoy rehabilitation and reconstruction activities and settlement of ongoing and completed projects." Virola said infrastructure investments by the private sector also managed to reverse the growth of private construction to 13.8 percent from negative 4.9 percent, resulting in an expansion of construction by 22.5 percent from 16.6 percent. Investments in durable equipment Investments in durable equipment, meanwhile, rebounded to a roaring of 34.1 percent from negative 19.7 percent a year ago as investments poured into 16 of 20 types of equipment, he added. "The growth in the investments in durable equipment was the highest registered since the second quarter of 1994." Virola said total exports soared to 27.4 percent, the highest since the third quarter of 1986, from negative 18 percent. Total imports, he added, rebounded to 23.9 percent from negative 2.1 percent, with the robust performance of both merchandise and non-merchandise imports. Total exports valued at P760.9 billion, however, fell behind total imports of P771.8 billion at current prices, resulting in a trade deficit of P10.9 billion. "Industry revved up the economy with a double-digit growth for the second consecutive quarter at 15.8 percent, supported by services which posted 6.4 percent while the agriculture, fishery and forestry sector declined by 3 percent for the third consecutive quarter. For the first semester, industry grew by 15.9 percent, the highest semestral growth ever," the board said in its report. Virola said consumer spending grew at a slower pace of 4.9 from 5.5 percent in the same comparable period. "Looking forward, we still expect the agriculture sector to remain sluggish given the possibility that a transition to La Niña weather phenomenon will materialize in the second half of 2010," said Socioeconomic Planning Secretary Cayetano Paderanga. He said the GDP growth for the full year of 2010 will be "leaning towards the upper end of the 5 to 6 percent GDP target — perhaps, even higher than that." The country's GDP for the second quarter grew faster than that of Indonesia (6.2 percent) and Vietnam's (6.4 percent) but slower than that of Malaysia (8.9 percent), Thailand (9 percent), and Singapore's (26 percent), he said. "We have once again shown that a high economic growth is attainable for the Philippines and all of us must work harder to maintain, if not surpass, this high economic growth achievement of almost 8 percent for the first semester of 2010," said Paderanga, who is also director general of the National Economic Development Authority. —JE/VS, GMANews.TV