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RP economy grows 6.9% in Q1, fastest in 17 years


(Update 3, 12:30 a.m.) The Philippines on Thursday reported that its gross domestic product grew 6.9 percent on-year in the first quarter of 2007, boosted in part by the strong local currency, low inflation, and pump-priming by the government. President Gloria Macapagal Arroyo made the initial announcement in Canberra, Australia, where she is currently on a state visit. Several minutes later, the National Economic and Development Authority released the official report locally. "The Philippines on a roll," President Arroyo said. "This is the fastest phase in almost two decades. 9.1 percent growth in services; 5.3 percent in industries; 4.2 percent in agriculture. We have also gained from the tripling of investments in economic zones and priority sectors," she added. NEDA said this is the strongest economic performance since the first quarter of 1990. On a seasonally adjusted basis, GDP grew 2.5 percent in the first quarter of the year from the previous period. NEDA revised its figures for GDP growth in the fourth quarter of 2006 to 5.5 percent from 4.8 percent. In the first quarter of the year, NEDA said gross national product rose 6.6 percent. GNP is the economic measure which takes into account remittances from overseas Filipino workers. However, ATR Kim Eng regional economist Luz Lorenzo, in a television interview said the faster than expected GDP growth in the first quarter is not sustainable. "What has driven the growth is consumption both by the private sector and the government. IN this sense, this is not sustainable. More will have to go to investments," Lorenzo said. Fixed investments rose 2.7 percent in the first quarter. But Lorenzo said growth in the next quarter may still be strong, albeit at a slower pace "if investments don't catch up. In 2006, the country's gross domestic product rose 5.4 percent, below government expectations, as successive typhoons in the last quarter of the year dragged the domestic economy. This year, the Philippine government aims to grow the economy between 6.1 percent to 6.7 percent. President Arroyo, however, said growth within the 7-percent mark is doable. Stocks, peso also strong Buoyed by the news of stronger than expected GDP growth for the first quarter of the year, Philippine share prices closed sharply higher on Thursday. The Philippine Stock Exchange composite index rose 76.12 points or 2.24 percent to 3,474.67. The broader all shares index meanwhile gained 43 points or 1.97 percent at 2,222.59. Trading was led by market heavyweight Philippine Long Distance Telephone Co. gained P85 or 3.44 percent at P2,555. The local currency was also showing strength against the US dollar during morning trade. The peso had a weighted average of 46.161 against the dollar during early trade, after it opened at 46.20. Volume traded as of 11:40 a.m. reached $329.50 million. The local currency closed at 46.330 against a greenback on Wednesday.- with a report from Cheryl Arcibal, GMANews.TV