Philippine economic growth accelerated unexpectedly in the third quarter, led by higher government spending and investment, the latest figures from the National Statistical Coordination Board showed Wednesday.
The gross domestic product rose 7.1 percent year-on-year in the third quarter, faster than an upwardly revised 6 percent expansion in the second quarter. Economists had forecast the rate of growth to slow to 5.4 percent last quarter.
This was the strongest growth rate since the third quarter of 2010, when GDP was up by 7.3 percent.
According to the statistical agency, increased consumer and government spending, higher investments in construction, and a third consecutive quarter of growth in external trade contributed to growth.
Government spending grew 12 percent and private consumption rose 6.2 percent. Capital formation, at the same time, gained 4.3 percent.
On a seasonally adjusted basis, GDP grew 1.3 percent quarter-on-quarter compared to 1.2 percent growth in the second quarter. Expectations were centered around a 0.6 percent rise.
The economy expanded 6.5 percent during the first nine months of the year, surpassing the upper end target of 6 percent growth for the whole year.
According to official data released this month, Philippine exports climbed 22.8 percent on an annual basis to $4.784 billion in September, reversing the 9 percent decrease seen in August.
The country's central bank last month cut its benchmark interest rates by 25 basis points, easing policy for the fourth time this year to prop up domestic demand as the global downturn and a strong peso continue to threaten the country's export competitiveness.
The Monetary Board of the central bank has said that the economic fundamentals of the Philippines remained firm while additional policy support could help ward off the risks associated with weaker external demand by encouraging investment and consumption.
Inflation eased to a four-month low of 3.1 percent in October, giving room for policymakers to cut interest rates further, if needed.
by RTT Staff Writer
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