Philippines economic growth slows in Q2

”Philippines

The National Statistical Coordination Board has revealed the Philippine economy grew at an annual rate of 3.4% in the second quarter – slowing from an annual growth of 4.6% in the previous quarter.

The expansion was less than the 4.4% expected by economists.

Compared with the previous three months, the economy, which is South East Asia’s fifth largest, grew by 0.6%.

The slowdown was led by weak demand in key markets which impacted on the country’s manufacturing sector.

Commenting on the figures, Diwa Guinigundo, deputy governor of the Philippines central bank, said: “We are quite surprised that growth decelerated further in the second quarter.

“This must be driven by the prolonged strong downpull of a weak global economy, which affected both exports and remittances,” he added.

However, the Government has maintained its projection of 7-8% growth for 2011.

Meanwhile, experts believe the central bank will keep interest rates on hold for the third consecutive meeting next month and possibly throughout the remainder of the year – primarily due to global growth uncertainties and easing inflationary pressures.

Several other Asian countries have published weak quarterly growth this week. Malaysia GDP slowed to 4% in the April to June period on an annual basis, while Singapore contracted by an annual rate of 6.5% compared with the previous three months.

Meanwhile, in other news this week, Philippine exports fell 9.4% in June on an annual basis – due to a drop in shipments of electronics goods, which slumped by 24% in the month – one of the largest export commodities of the Philippines.

In other Asian news today, it was revealed Japanese factory output rose 0.6% in July on a monthly basis – much less than the 3.8% rise experienced in June and lower than the 1.5% rise expected by analysts.

Furthermore, factory output in South Korea declined 0.4% last month compared with June.

The factory output figures will raise fears about the global economic recovery as both are Asia’s leading exporters and are a general indicator of the health of the global economy.

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