Philippine economy grows 5.9% in 2Q

The Philippines said Thursday the economy grew a better-than-forecast 5.9 percent in the three months to June, largely due to a strong services sector. And the government said the second-quarter figures -- which also saw growth in the first half at 6.1 percent after a strong 6.3 percent expansion in January-March -- would continue for the rest of 2012. "The resilient services sector remained the main driver of growth," said Lina Castro, secretary general of the National Statistics Coordination Board. Independent analysts had widely predicted 5.4 to 5.8 percent growth in the second quarter. Castro said the services sector had accounted for 4.3 percentage points of the growth figure for the three-month period, while industry accounted for 1.5 percentage points and agriculture 0.1 points. The figures led Socio-economic Planning Secretary Arsenio Balisacan to predict "we will be close to the upper end of the (5.0-6.0 percent) range", for the whole of 2012. The momentum of growth "will not dissipate in the succeeding quarters", he told reporters. He cited "accelerated government spending on infrastructure" for helping growth, as well as low inflation, improved exports, rising tourist arrivals and the continued remittances of about 10 million Filipino overseas workers. A rash of storms and heavy rains that caused massive flooding in Manila and surrounding areas in recent months were unlikely to have a huge effect on the growth rate in 2012, Balisacan added. "Their impact on agriculture was quite modest and their likely impact (on the whole economy) was also quite modest," he said. But he warned that the economy faced challenges for the rest of the year stemming from the global economic slowdown and the expected return of the "El Nino" weather phenomenon.