Philippines growth slows sharply in first quarter

Image source, AFP
Image caption, Weak export growth on external demand has hit the Philippines' growth, said analysts

Growth in the Philippine economy slowed in the first quarter of the year to its weakest annual pace since 2011, official figures showed.

The economy expanded 5.2% in the first three months from a year ago, which is the slowest rate since the last quarter of 2011, when growth was 3.8%.

The figure was also well below market forecasts for 6.6% growth.

The economy was hit by weak growth in the agriculture and manufacturing sectors, the government said.

Growth on a quarterly basis was the lowest in six years. The economy grew by just 0.3% in the quarter on a seasonally-adjusted basis, compared with 2.5% growth in the October to December period.

Weak demand from its major trading partners has had a bigger than expected impact on the export-driven South East Asian economy, analysts said.

Earlier this month, data showed that exports grew 2.1% in March, compared with more than 12% in the same period a year ago.

"External demand has been challenging across a lot of the Philippines' major trade partners such as Japan and China and I think that showed in the GDP (gross domestic product) print," Jeff Ng, economist at Standard Chartered, told Reuters.

"This poses downside risks to our forecast of 6% for full-year GDP growth."

Despite the disappointing data, the government said it was not abandoning its growth target of 7-8%.

Arsenio Balisacan, the economic planning chief, said government spending and exports were expected to pick up in the coming quarters.

The country's central bank has kept the overnight lending rate steady at 4% since October last year as inflation remains within its target of 2 to 4%.

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