The Philippine economy grew at a faster pace in the second quarter largely driven by government spending, official data showed Thursday.
Gross domestic product advanced 6.5 percent year-on-year in the second quarter, slightly faster than the 6.4 percent expansion seen in the first quarter, the Philippine Statistics Authority said.
In the corresponding period of last year, the rate of expansion was 7.1 percent.
During the first half of the year, the economy grew 6.4 percent from same period of previous year. The government targets 6.5-7.5 percent growth for the full year.
Quarter-on-quarter, the economy grew 1.7 percent following the previous quarter’s 1.3 percent growth.
On the production side, industry logged the fastest annual growth of 7.3 percent, followed by services with 6.1 percent expansion. The farm sector rose 6.3 percent, in contrast to the 2 percent decline in the previous year.
At the same time, expenditure-side breakdown of GDP showed that the household expenditure grew by 5.9 percent annually in the second quarter, slower than the 7.5 percent growth in the same quarter of 2016.
Likewise, government final consumption expenditures climbed 7.1 percent but slower than the 13.5 percent in the same period in 2016.
Investments in construction grew by 7.3 percent and that in capital formation for durable equipment grew by 8.7 percent.
Exports of goods continued to expand with 23 percent growth in the second quarter, while the increase in shipments of services decelerated to 9.9 percent from 19.3 percent in the same period last year.
Imports of goods grew by 20.6 percent and imports of services gained 10.7 percent.
The main risk to the outlook is the political situation, amid signs that Duterte’s controversial war on drugs and flirtations with autocracy are starting to undermine sentiment and drag on investment, Gareth Leather, a senior Asia economist at Capital Economics, said.
Looking ahead, the economist expects the economy to continue to grow strongly over the next year.