PHL economy likely posted modest growth in second quarter, NEDA says

The National Economic and Development Authority estimated that the Philippine economy likely posted a modest growth in the second quarter. Cayetano Paderanga Jr., Socioeconomic Planning secretary and NEDA director general said on Thursday that “available data" indicate that the economy likely grew between 4.5 percent and 5.5 percent in the April to June period. In the second quarter of 2010, the Philippine economy grew 7.9 percent, boosted by election expenditures, investor optimism and global economic recovery. Economic managers have kept a growth target for the local economy at 7 percent to 8 percen this year despite the slower growth of 4.9 percent in the year’s first three months. “The second quarter is expected to have been supported by a robust growth in agriculture but growth in industry and services may have been slower compared to last year. The increase in crop production due to the recovery from the El Niño effects last year contributed to the strong growth in agriculture, hunting, fisheries and forestry," Paderanga said. Agriculture growth, however, could have been dampened by the adverse weather conditions during the period. The industry sector, meanwhile, was probably affected by the adverse effects of external developments on the manufacturing sector and the expected continued contraction in public construction. Growth in the services sector, on the other hand, may have been pulled down by significant contractions in vehicle sales due to supply chain disruptions associated with conditions in Japan. The transportation sector was also affected by high oil prices. Paderanga said the second quarter growth was attained despite the external shocks from natural disasters in Japan, the slow recovery of the US, the debt crisis in some of the countries in the Euro zone, the social unrest in the Middle East and North Africa or the MENA region, and higher oil prices. The official estimates on the National Income Accounts for the second quarter will be released on August 31. -- CMA/OMG, GMA News