MANILA - The better-than-expected 6.3 per cent expansion of the Philippines' gross domestic product last quarter has raised hopes for sustained momentum in 2016. But headwinds are about to get stronger.
The October to December growth was the fastest for the year 2015, which saw the first two quarters suffering a blow from anemic government spending. This brought the full-year growth to 5.8 per cent, the slowest annual expansion since 2011.
But Arsenio Balisacan, the outgoing national economic planner, said 5.8 per cent growth was "respectable" for a year with a difficult external environment, the onset of El Nino and "challenges in government spending" in the first half. He had previously set 6 per cent as a "realistic target" to replace the original forecast of 7 per cent to 8 per cent.
Household consumption, the Philippines' most reliable economic driver that generates two-thirds of the Southeast Asian nation's US$300 billion (S$428 billion) economy, posted 6.2 per cent growth for 2015, up from 5.4 per cent the year before, with inflation at record lows due to cheap oil.
Strong consumer demand was sustained by steady remittances from overseas and solid revenues in the booming outsourcing industry. This has helped sustain the economy through a weak export period that has hurt other countries in the region, particularly Indonesia and Malaysia.
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