Friday, August 29, 2008

Philippines: Economic Growth At Slowest In Three Years

MANILA, PHILIPPINES (August 29, 2008) - Philippine economic growth in the second quarter slowed to its lowest rate in three years as higher inflation hurt consumption and mining output contracted, the government said.

Gross domestic product in April-June quarter grew 4.6% from the same quarter a year ago. Growth in the first quarter was revised to 4.7% from an earlier 5.2%. GDP growth in the second quarter of 2007 was a much stronger 8.3%.

The "uninspiring growth" in the country's economy was driven the the relatively strong performance of manufacturing, agriculture and construction, the National Statistics and Coordinating Board said in a statement.

But overall economic growth _ the slowest since 4.4% in the first quarter of 2005 _ was clipped by an 18.5% contraction in the mining and quarrying sector, as well as sluggishness in services, the linchpin of the economy with a 49.2% share of total GDP.

"Achieving the full year target will be a tough challenge as we continue to face high food and oil prices," said Socio-economic Planning Secretary Ralph Rector.

But he said tightness of the global economy is somewhat easing and inflation is also expected to taper in the latter months of 2008. Recto said to achieve the growth target of 5.5%, the economy has to grow by 6.4% in the second half of the year.

Services rose 4.3% for the second quarter from 8.4% for the same period last year. That was its lowest rise since the third quarter of 2001.

Agriculture accelerated by 4.9% in the quarter compared to 4.2% last year. Exports rose 7.7% from 4.9% last year.

Strong remittances from overseas workers boosted income from abroad, which went up by 14.1%_ still slower than its 25.3% rise last year, the NSCB said.

Consumer spending growth slackened to 3.4% from 5.6% a year ago due to high prices, while government spending shrank 5.1% from a 11.9% gain last year.

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