Wednesday, 28 November 2012

Philippines Update - 7.1% Q3 GDP Growth

A few months ago, I made a post about potential new emerging market plays, focusing specifically on the Philippines.  The case was made that there were a number of positives for the economy as a whole as it moves to modernize and industrialize its still relatively agricultural economy.  Since that post, the Philippines market index has jumped 13% and is up 40% YTD. also picked up on the topic a few months later, making similar points.

Today, Bloomberg reported:

Philippine growth unexpectedly accelerated last quarter to the fastest pace since 2010 as government spending and investment increased, easing pressure on the central bank to cutinterest rates further. Stocks rose.
Gross domestic product increased 7.1 percent in the three months through September from a year earlier, compared with a 6 percent gain in the previous quarter, the National Statistical Coordination Board said in Manila today. The pace exceeded all 22 estimates in a Bloomberg survey, whose median was 5.4 percent.

President Benigno Aquino is increasing spending to a record this year while seeking more than $17 billion of investment in roads and airports. The Southeast Asian nation is forecast to be among the 10 fastest growing economies in 2012, according to a Bloomberg survey, making it less likely that Bangko Sentral ng Pilipinas will cut its benchmark interest rate again in December. 

Philippine exports rose 22.8 percent in September from a year earlier, as data signaling a recovery in the U.S. and China boosted the outlook for Asian goods. Inflation eased to a four- month low of 3.1 percent in October, while remittances, which make up the equivalent of about 10 percent of GDP, surged to a record $1.8 billion in September.
The Philippine economy expanded 6.5 percent in the January- September period, today’s report showed. Public construction in the third quarter climbed 23.7 percent from a year earlier, while government spending gained 12 percent and household spending advanced 6.2 percent.

Definitely continued strength in the Philippines as I pointed out a few months ago.

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