For the first half of 2012, the Philippine economy posted its strongest performance since 2010 and has exceeded the expectations of economists.
According to the National Statistical Coordination Board, the country’s gross domestic product (GDP) increased 5.9 percent for the first semester, where Q2 grew 6.3 percent from Q1. Bloomberg News reported that it was 5.5 percent for the median of 18 predictions. The economic growth was said to have been propelled by higher public spending and consumption.
Other key factors that fuelled the growth are President Aquino’s augmented outlays to help improve local industries and obtaining pledges from organizations such as Glencore International Plc and Gazasia Ltd. Another one is Bangko Sentral ng Pilipinas’ move of cutting its benchmark down to 3.75 percent.
UBS AG Economist Edward Teather said the Philippines has shown strong growth. He added that the rates for the rest of the year from BSP will be a determining factor for the country’s economy. On the other hand, BSP Governor Amando Tetangco said the financial institution will be the one to calibrate any changes depending on increase in government spending and global demand. Peso Gaining Strength
Among the 11 most-traded currencies in Asia, the Philippine peso was cited as the strongest performer for this year. It recently rose 0.1 percent to 42.295 against the dollar.
Meanwhile, emerging markets are seen reinforcing their economies with the likes of Brazil which lowered its benchmark rate for the ninth time and China’s People’s Bank decreased borrowing costs last June-July. Thai Central Bank Governor Prasarn Traratvorakul said they are waiting for the impact of Europe’s crisis and will make changes accordingly.
President Aquino is eyeing to increase spending this year to achieve a 7 percent growth rate in 2013, from a target of 6 percent this year.