Philippines Posts Strongest Economic Growth in Asia at 7.1%

Philippines Posts Strongest Economic Growth in Asia at 7.1%

The Philippine economy grew at its fastest pace in three years last quarter, underscoring the nations resilience to global risks as investment surged and consumers spent more. Stocks gained.

Key Points

  • Gross domestic product increased 7.1 percent from a year earlier, the Philippine Statistics Authority said in Manila Thursday. The median estimate of 15 economists surveyed by Bloomberg was 6.7 percent
  • Compared with the previous quarter, GDP rose 1.2 percent, in line with economists estimates
Philippines Posts Strongest Economic Growth in Asia at 7.1%

Big Picture

Undeterred by risks such as Donald Trumps protectionist ambitions and President Rodrigo Dutertes rants against the U.S., the Philippine economy is set to expand more than 6 percent until 2018 to rank among the fastest-growing in the world, according to economists surveyed by Bloomberg. Gifted with a young population and backed by $50 billion of revenue from remittances and outsourcing, the Southeast Asian economy is getting an additional boost from Dutertes $160 billion-infrastructure plan aimed at creating jobs.

Markets

  • Philippine stocks rose a second day, climbing as much as 2.2 percent. They were up 1.1 percent as of 11:01 a.m. in Manila.
  • The peso was little changed at 49.32 per dollar.

Economist and Trader Takeaways

  • Philippines will remain an outperformer in the region, said Rahul Bajoria, a senior economist at Barclays Plc in Singapore. It is domestically driven, with consumption holding up quite well and the fiscal spending being planned. The global risks were seeing including to trade wont fundamentally alter its prospects.
  • In the short term at least, we expect the economy will continue growing at a decent pace, Gareth Leather, senior Asia economist at Capital Economics Ltd. in London, said in a note. The foundations are in place for growth to remain strong, but recent political events, both in the US and domestically, have made the outlook much less certain.
  • Putting money on infrastructure-related stocks is the smart bet and its exactly what I am doing, said John Padilla, who helps manage about $9.1 billion at Metropolitan Bank & Trust Co., the Philippines third-largest money manager. This growth poses now more challenge for President Duterte to keep the pace. It supports the view that Philippines needs infrastructure to sustain this growth.”

Other Details

  • Household spending, which makes up about 70 percent of GDP, rose 7.3 percent from a year earlier
  • Government spending gained 3.1 percent
  • Investment surged 20 percent

Read more: http://www.bloomberg.com/news/articles/2016-11-17/philippine-growth-quickens-to-7-1-on-duterte-s-spending-spree