Second quarter GDP grew 5.6%, some notable improvements compared to the first quarter

2Q15 GDP growth reached 5.6%, faster than the first quarter’s revised GDP growth of 5.0%. Given the economy’s performance for the second quarter, GDP growth for the first half of the year reached 5.3%.

Although GDP growth for the second quarter was somewhat disappointing as it missed consensus growth expectations of 5.7%, there were some notable improvements compared to the first quarter.

• Government spending growth accelerated to 3.9% from 1.7% in the first quarter as public construction jumped by 20.4% after falling by 24.6% during the first quarter
• Consumer spending growth remained robust, accelerating to 6.2% in the second quarter from 6.0% during the first quarter. This is most likely partly attributable to the faster growth of OFW remittances during the second quarter as reflected by the acceleration of net primary income from abroad to 5.0% during the second quarter from 0.8% during the first quarter

Growth in investment spending or capital formation accelerated further to 17.4% from 11.6% during the first quarter as construction spending increased further by 13.1% from 6.7% q/q. The continuous growth in investment spending implies more sustainable economic growth going forward.

Exports surprisingly remained positive, growing by 3.7% during the second quarter as the 31.3% jump in the exports of services (largely through the BPO sector) more than offset the 3.0% drop in the exports of goods. This continues to show the resilience of the Philippine economy to the weakness in the global economy.

- COL financial