MANILA (UPDATE) - The Philippine economy grew at its fastest clip for 2019 in the quarter ended December, official data released Thursday showed, as authorities kept watch on the Taal Volcano.
Gross domestic product expanded 6.4 percent in the fourth quarter compared to the revised 6 percent in the third quarter and the 6.4 percent median forecast of 22 economists in a Bloomberg poll.
This brought average GDP growth for the full-year to 5.9 percent, slightly below government's 6 to 7 percent goal.
The full year 2019 GDP growth, however, is the slowest in 8 years after facing “several challenges” such as the budget impasse, the effects of the African Swine Fever (ASF) on agriculture and the election ban on infrastructure spending, Socioeconomic Planning Secretary Ernesto Pernia told reporters.
The Philippines is “likely” second to Vietnam’s 7 percent and China’s 6 percent fourth quarter growth, he said.
Growth in the service sector and the 34 percent growth in construction spending due to the Department of Public Works and Highways' completed acquisitions of right-of-way deals and construction of state buildings contributed to the fourth quarter GDP growth, he said.
“We are thankful that our colleagues in Congress and the Department of Budget and Management ensured the timely passage of the 2020 general appropriations act and the validity of the extension of the 2019 fiscal program which are both critical to our efforts to spur economic growth,” Pernia said.
Economic managers earlier blamed the delayed passage of the 2019 budget for slower growth in the first and second quarters of last year, but said they expected growth to rebound in the second half of the year as spending increased and interest rates were cut.
“I think instead of looking at just the number, they just want to see if there’s a pickup in construction spending, private consumer spending is still healthy,” Regina Capital head of sales Luis Limlingan told ANC.
“Given that we don’t have problem of delayed budget of 2019, hopefully 2020 is going to be picking up especially in the first half,” he said.
The state statistics agency earlier reported that the economy grew 6.2 percent in the third quarter, but lowered this to 6 percent on Wednesday.
"Sluggish" growth momentum could move the Bangko Sentral ng Pilipinas (BSP) to cut the benchmark lending rate as early as February, an analyst said on Wednesday.
BSP Governor Benjamin Diokno has signaled a 50-point rate cut this year.
The Philippines should “remain vigilant” in monitoring the world crude oil market, the emergence of a new coronavirus strain from China and continued unrest of the Taal Volcano, Pernia said.