Philippine economic growth slows to three-year low

Philippine economic growth in the first quarter slowed to a three-year low of 5.2 percent, well below forecasts, due to lethargic government spending and weak exports, officials said Thursday. The expansion in the January-March period for what has recently been one of Asia's best performing economies was the worst since the 3.8-percent expansion in the last quarter of 2011, according to government data. It was also lower than the 6.6-percent median forecast of a Bloomberg survey and well off Manila's full-year forecast of seven to eight percent. "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 the overall growth of the economy," Economic Planning Secretary Arsenio Balisacan told reporters. "Exports were the other source of the slowdown," he said, blaming the growth downtrend in China and some emerging economies for the weak demand. The government also revised growth in the fourth quarter of last year to 6.6 percent, from 6.9 percent. Stocks fell immediately after the announcement. The Philippine Stock Exchange Index was down 1.27 percent at 7,502.19 in mid-morning trade. Government spending of 504 billion pesos ($1.2 billion) in the first quarter was 13 percent below target despite growing by four percent from the same period in 2014, according to data from the finance department. Export growth in March slowed to 2.1 percent from 12.1 percent during the same period in 2014, according to the national statistics office. Balisacan said the Philippines could meet at least the low end of its seven to eight percent target as government spending started to pick up March, with inflation and interest rates to remain low. "Of course that's not impossible, especially now that the conditions in terms of macroeconomic fundamentals are good," he said. Finance Secretary Cesar Purisima said public spending was "largely within our control" and would improve in the coming quarter. "Numbers fluctuate each quarter but they clearly show an unmistakable positive trajectory. We are less concerned about the quarterly numbers game than getting the foundations of our growth right," he said in a statement. Once the second-fastest growing economy in Asia behind China, the Philippines now also trails neighbours Vietnam and Malaysia, he said.