Philippine economy grows 5.9% in second quarter

The Philippines economy grew a better-than-expected 5.9 percent in the second quarter, boosted by increased investment and a drive against corruption, the government said Thursday. The strong figure for April-June helped the country achieve 6.1 percent growth in the first half, with officials confident the good times would be sustained for the rest of the year. Socio-economic Planning Secretary Arsenio Balisacan credited President Benigno Aquino's anti-corruption reforms for part of the growth, saying they had boosted the confidence of local and foreign investors. "We obviously would not have achieved (this growth) without the substantial improvement in the way people perceive the government... and the way we do business," Balisacan told reporters. The economy grew a better-than-expected 6.3 percent in the January-March quarter, the government said, revised slightly up from an earlier estimate of 6.4 percent. Balisacan expressed confidence the momentum would continue, with 2012 growth settling at the "upper end" of the government's target range of 5.0 to 6.0 percent. The second quarter gross domestic product (GDP) figure exceeded the 5.4-5.8 percent forecasts of independent analysts. Financial institutions also widely tipped growth to range from 4.8 to 5.4 percent. Balisacan said the second quarter figure was the third highest in the region, exceeding Malaysia, Thailand, Vietnam and Singapore. He credited the higher growth to stepped up government spending on infrastructure, low inflation, improved exports, rising tourist arrivals and the earnings sent home by about 10 million Filipino working abroad. The main economic challenges for the rest of the year stem from the global economic slowdown and the expected return of the "El Nino" weather phenomenon, which could hit agriculture, Balisacan said. The latest results are further proof of the Philippines' resilience even in the face of global economic shocks, said Mark Angeles, head of research of First Metro Securities Inc. "Right now, I think the Philippines is about to take off. It was the least hit by the economic slowdowns in the United States and Europe," he told AFP. The Philippines had not experienced a year of negative growth since the Asian financial crisis of 1998 as local consumption, fuelled by overseas remittances, helped keep the economy moving, he added. The government has gained reputation for resisting corruption and of being friendly to foreign investment, while spending money on much-needed infrastructure, Angeles said, adding that consumption remains strong and the country had a youthful, educated, English-speaking workforce. The main concerns were all external -- the economic slowdown in the United States, Europe and even China -- but once they are resolved the Philippines should see a surge in exports, he said.