Economy grows by 6.1% in 2014, gov't misses target

MANILA, Philippines - The Philippine economy grew by 6.9 percent in the fourth quarter of 2014, bringing last year's gross domestic product growth to 6.1 percent.

The full-year GDP growth for 2014 is lower than the government's target of 6.5 to 7.5 percent. The Philippine economy grew by 7.2 percent in 2013.

Socioeconomic Planning Secretary Arsenio Balisacan said the growth in the last quarter of 2014 appears to be broad-based, with the agriculture, industry and services sectors showing robust growth. Compared to other economies that have already released economic data for 2014, the Philippine GDP growth ranked second to China's 7.3 percent and ahead of Vietnam's 6 percent.

The agriculture sector accelerated to 4.8 percent in the last quarter of 2014 from the 0.9 percent posted in the same period in 2013. Balisacan said the rebound in the crops and fisheries output pushed  growth in the sector.

Meanwhile, the industry sector grew its highest in the last six consecutive quarters to 9.2 percent. Balisacan, who is also the director general of the National Economic and Development Authority, said the sector's growth was driven by a double-digit expansion in construction and a strong performance in the manufacturing subsector.

The services sector grew by 6 percent, and remains the biggest contributor to the country's economic growth owing to its huge size, Balisacan said. 

On the demand side, strong private consumption in the fourth quarter was on the back of higher purchases for food and non-alcoholic beverages, durable equipment and private construction. 

Balisacan also cited the growth in the number of employed Filipinos, which rose  from 37.8 million to 38.8 million. Exports, on the other hand, grew by 15.5 percent in real terms in the fourth quarter and hit a full-year expansion of 12.1 percent relative to the previous quarter’s growth of 9.9 percent.

Balisacan said the government stood by its commitment to ramp up and catch up with its spending in the last three months of 2014, as shown by the 9.8-percent increase of government final consumption expenditure during the period. This is a turnaround from the 2.6-percent contraction in the third quarter of 2014 and from a 0.4-percent contraction in the last quarter of 2013. Double-digit growths in personal services and maintenance and other operating expenses were recorded in this period, he added.

"Clearly, the economic policies and strategies we are implementing to achieve sustained and inclusive growth are bearing fruit," Balisacan said.

He said economy is anticipated to gain further traction in 2015 thanks to the domestic front, despite the lingering and uneven external conditions.

"Overall, the Philippine economy’s performance in 2014 and the preceding years starting in 2010 shows how our country can no longer be called the 'sick man' of Asia. Our economic growth is becoming more competitive with our East and Southeast Asian neighbors. We have avoided the dreaded boom-and-bust cycle that has hounded our economy for decades," he said.

For 2015, the government bats for growth between 7 to 8 percent.