Philippines growth hits 7.5% despite Asia slowdown

The Philippines economy expanded 7.5 percent in the April-June quarter, the government said Thursday, as higher public and consumer spending helped it defy an Asian slowdown. The data provides a welcome boost to the government at a time when the country's stock market and currency slump as foreign investors pull out of emerging economies in expectation of an end to the US Federal Reserve's stimulus. "While other economies that were growing at a fast rate are now decelerating due to a global slowdown, the Philippine economy has shown an ability to withstand external shocks," Socio-economic Planning Secretary Arsenio Balisacan said. Thursday's data are a sharp improvement from the 6.3 percent seen in the same period in 2012, the National Statistical Coordination Board said, while it also marks the fourth straight quarter of growth above 7.0 percent. It also brings GDP growth in the first six months of 2013 to 7.6 percent, compared with 6.4 percent in the same period in 2012. The economy is now expanding faster than any other in Southeast Asia, while the second-quarter results are in line with growth in regional powerhouse China. The rebound has been overseen by President Benigno Aquino, who was elected by a landslide in 2010 on the back of a vow to revive one of Asia's laggard economies by fighting entrenched corruption that has stymied business activity. The Philippines achieved an investment-grade credit rating this year, further boosting business confidence as inflation remained tame and the government's finances improved. Balisacan said the first-half data indicated that gross domestic product (GDP) growth in 2013 "would likely surpass" the official target of 6-7 percent. "We are in a better position than many of the emerging economies," he added. His comments come as the Philippines -- like several emerging markets around the world -- sees huge outflows of cash that had been pumped into the economy over the past year as the Fed kept interest rates ultra-low. The foreign withdrawal has seen markets from Manila to Jakarta to Bangkok slump in recent weeks and their currencies tumble. The pesos has fallen about 8.5 percent against the dollar since May. However, Philippine stocks were 3.62 percent higher Thursday after the figures were released. Emilio Neri, corporate economist of Bank of the Philippine Islands, one of the country's top lenders, told AFP the high growth figures for the first half were "a fairly rare feat considering that everybody else is going down". Manila has avoided the worst because it had not been to dependent on foreign funds and did not borrow too much abroad at the height of the US Fed's easy money policy. "We did not get a hangover from this party that the US Federal Reserve hosted," Neri added.