Philippine economy grows lower than expected in third quarter

Nov 28, 2011, 6:01 GMT

Manila - The Philippine economy grew by 3.2 per cent in the third quarter, less than expected as government spending failed to provide a boost amid a faltering global economy, the government said Monday.

Gross domestic product growth in July-September was down from 7.3 per cent last year, said Ramon Virola, secretary general of the National Statistical Coordination Board.

He said growth for the first nine months of 2011 was 3.6 per cent, 'quite a distance' from the lower end of the government's whole year target of 4.5 per cent.

'The so-called death spiral of debt that hounds our trading partners, the uninvigorating, albeit already expanded government spending . contributed to this relatively lethargic growth,' he said.

He said the construction sector suffered 'from the much-delayed implementation' of a government programme to tap the private sector for infrastructure projects, while exports declined 13.1 per cent.

Virola said services carried the load, expanding by 5.3 per cent in the third quarter.

Industry declined by 0.2 per cent, dragged down by construction's 12.2 per cent-decline, while agriculture, forestry and fishing expanded by 1.8 per cent from a decline of 2 per cent last year.

Gross national product, which includes income from foreign investments and remittances from millions of overseas Filipinos, expanded by 1.6 per cent in the quarter from 6.9 per cent in 2010.