MANILA: The Philippine economy grew at its strongest quarterly pace in two years in January-March, powered by government spending, domestic demand and an export rebound, though analysts cautioned it may lose momentum quickly given headwinds from Europe.
Government consumption surged 24 per cent in the first quarter from a year ago, the highest in at least two years, and exports reversed two quarters of decline to post their fastest growth since the fourth quarter of 2010.
Recent data from other Asian economies such as China, South Korea and Taiwan, however, has shown weakness in export demand in the second quarter as Europe's debt crisis deepens and China's growth slows, although some improvement has been seen in shipments to the United States.
"The government's fiscal spending since the start of the year has gone up. That has supported growth," said Eugene Leow, an economist at DBS Bank in Singapore. "We do not think the growth momentum can be sustained because of the troubles in Europe.April data from the region has also softened."
Gross domestic product rose a seasonally adjusted 2.5 per cent in January-March from the previous quarter, the economic planning agency said, slightly below the 2.9 per cent forecast by economists.
From a year earlier, the economy climbed 6.4 per cent in the first three months, the fastest in six quarters and outpacing growth in Indonesia, Vietnam and Singapore.
The figure was well up on a 4.6 per cent growth forecast in a poll. Central bank Governor Amando Tetangco said the higher than forecast outcome made the government's 2012 target of 5-6 per cent economic growth "more manageable," adding that there was less need for monetary authorities to support growth.
"We are, of course, hopeful that this trend would continue, as the national government accelerates spending and private consumption remains robust," Tetangco said in a statement.
"Nevertheless we are mindful of the risks in the external environment, particularly the weakness in the euro zone, tentative growth in the United States and slowdown in China," he said.
indiatimes.com
Government consumption surged 24 per cent in the first quarter from a year ago, the highest in at least two years, and exports reversed two quarters of decline to post their fastest growth since the fourth quarter of 2010.
Recent data from other Asian economies such as China, South Korea and Taiwan, however, has shown weakness in export demand in the second quarter as Europe's debt crisis deepens and China's growth slows, although some improvement has been seen in shipments to the United States.
"The government's fiscal spending since the start of the year has gone up. That has supported growth," said Eugene Leow, an economist at DBS Bank in Singapore. "We do not think the growth momentum can be sustained because of the troubles in Europe.April data from the region has also softened."
Gross domestic product rose a seasonally adjusted 2.5 per cent in January-March from the previous quarter, the economic planning agency said, slightly below the 2.9 per cent forecast by economists.
From a year earlier, the economy climbed 6.4 per cent in the first three months, the fastest in six quarters and outpacing growth in Indonesia, Vietnam and Singapore.
The figure was well up on a 4.6 per cent growth forecast in a poll. Central bank Governor Amando Tetangco said the higher than forecast outcome made the government's 2012 target of 5-6 per cent economic growth "more manageable," adding that there was less need for monetary authorities to support growth.
"We are, of course, hopeful that this trend would continue, as the national government accelerates spending and private consumption remains robust," Tetangco said in a statement.
"Nevertheless we are mindful of the risks in the external environment, particularly the weakness in the euro zone, tentative growth in the United States and slowdown in China," he said.
indiatimes.com
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