MANILA — Philippine economic growth slowed to a three-year low last quarter, missing most analyst estimates, as government spending and exports faltered at the start of the year. Stocks fell.
Gross domestic product increased 5.2% in the three months through March from a year earlier, the Philippine Statistics Authority said in Manila Thursday. That compares with a 6.6% median estimate in a Bloomberg survey.
With about a year left in office, President Benigno Aquino is taking steps, including amending tax laws and cracking down on corruption, to ensure gains last beyond his term. Government spending has been uneven however, and Economic Planning Secretary Arsenio Balisacan said today the uptick in budget disbursement wasn't reflected in the first quarter and that he expects it will pick up in the remainder of the year.
"This is a very weak set of numbers," said Michael Wan, an economist at Credit Suisse Group AG in Singapore. "Industrial production, government spending were a drag to the economy. Moving forward, I would be biased to look past this weakness. The macrofundamentals are intact and Philippines compares more favourably" to other Southeast Asian countries.
The peso was little changed at 44.68 against the US dollar as of 11.28am Bangkok time, having erased its gains from before the release of the report. The Philippine Stock Exchange index fell 1.5% to a four-month low.
Dry spell
First-quarter GDP growth is the slowest since the three months through December 2011, according to data compiled by Bloomberg based on previous figures. The economy expanded 0.3% from the previous quarter, compared with a median estimate of 1.4%.
Bangko Sentral ng Pilipinas held its benchmark rate at 4% this month, and most economists forecast it will remain unchanged for the rest of the year. The central bank raised its inflation forecast for this year and next, citing the El Nino weather pattern, with more than half the country's provinces suffering from a dry spell.
Strong remittances, falling oil prices, and upbeat consumer and business sentiment indicate stronger growth in 2015, while expansion next year will be supported by election-related spending, the World Bank said last month.
"While growth in the private sector remains robust, the slower-than-programmed pace of public spending, particularly the decline in public construction, has slowed down overall growth," Mr Balisacan said today. "Despite this lower-than- expected growth, it is reasonable to believe that the economy will grow at a faster rate in the remaining quarters."