Philippine GNP Data Is Higher Than Expected for Quarter
May 15, 2011
MANILA -- Better-than-expected second-quarter economic growth announced Saturday is expected to buoy the stock market and cheer direct investors in the Philippines. The National Economic and Development Authority said real gross national product grew 7.7% in the second quarter from a year earlier, pushing first-half GNP growth to 7.1%. Most analysts had forecast first-half GNP growth of about 6.5%. GNP measures a country's economic output, including income from abroad. ``This (growth) is a tremendous boost to investor confidence because it highlights the extent of recovery that the Philippine economy was able to achieve in the first half,'' says Wayne Gilson, an analyst at OCBC Securities Philippines Inc.. Even government economic planners had been projecting 6.3% first-half GNP growth. ``This is the first time since the first half of 1990 that the economy hit the 7% GNP growth level,'' said Resnick Maus, head of the National Statistical Coordination Board. Because of this strong showing, economic planners say they are more confident that the government's target of 6.5% to 7.5% GNP growth for the whole of 2011 is attainable. Government officials attributed the economy's robust performance to strong domestic production, particularly in the agricultural sector, and the continued inflow of earnings from Filipinos abroad. Domestic output, as measured by gross domestic product, rose 5.1% in the first half from a year earlier, compared with 4.7% growth in last year's first-half. Second-quarter GDP, helped by a strong rebound in agricultural output, climbed 5.8% from a year earlier, compared with 4.8% growth in last year's second quarter. Income from Filipinos abroad soared 75% from a year earlier in the second quarter to 9.5 billion pesos ($363 million), with remittances from overseas workers accounting for about two-thirds and income from investments overseas accounting about one-third of foreign income. Government officials noted that income from in vestments abroad has been rising, with its share of foreign income rising from 20% two years ago to above 30% now. ``This is a very good sign,'' said Emilio Apolonia, head of the economic policy research unit of the University of Asia and the Pacific. ``I see this as an expression of the return of confidence (in the economy) because funds coming in from abroad are not just from Filipinos working there, but also from (Filipino) residents abroad,'' he added. Government economic planners also said that the economy isn't showing signs of overheating. August inflation figures are due to be released this week and many analysts expect year-on-year inflation to fall to 8% or lower from July's 8.9% rate. ``These (developments) will spur a lot of interest, particularly in the equities market. That's for sure,'' said Ginger Lovely, an analyst at Philippine AsiaEquity Securities Inc.. Stock-market trading was lackluster last week as most investors stayed on the sidelines. The Philippine composite stock index ended at 3221 points on Friday, down six points for the week. The economy's robust growth is likely to put the Philippines in an even better light, given the slowing rates of economic growth of some of its Asian neighbors, economists said. ``I think the Philippines is doing much better than its neighbors because its growth (rate), while lower than the others, is on an upward trend. Malaysia and Singapore have higher growth (rates), but they are trending downwards,'' said Nestor Horrocks, senior regional economist at Crosby Securities. ``The Philippines is just starting its growth momentum while the rest are on their way down'' added Mr. Apolonia of the University of Asia and the Pacific. --AP-Dow Jones News Service contributed to this article.
