4/5/2017 Philippines Posts Strongest Economic Growth in Asia at 7.

1% - Bloomberg

Philippines Posts Strongest Economic Growth in Asia at

7.1%
by Siegfrid Alegado and Cecilia Yap
November 17, 2016, 10:05 AM GMT+8
Updated on  November 17, 2016, 12:32 PM GMT+8

➞ Nation seen as among fastest-expanding in the world until 2018

➞ Outsourcing, remittances help guard against global risks

The Philippine economy grew at its fastest pace in three years last quarter, underscoring the nation’s resilience to
global risks as investment surged and consumers spent more. Stocks gained.

Key Points

• Gross domestic product increased 7.1 percent from a year earlier, the Philippine Statistics Authority said in
Manila Thursday. The median estimate of 15 economists surveyed by Bloomberg was 6.7 percent

• Compared with the previous quarter, GDP rose 1.2 percent, in line with economists’ estimates

Big Picture

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4/5/2017 Philippines Posts Strongest Economic Growth in Asia at 7.1% - Bloomberg

Undeterred by risks such as Donald Trump’s protectionist ambitions and President Rodrigo Duterte’s rants
against the U.S., the Philippine economy is set to expand <http://www.bloomberg.com/news/articles/2016-11-
15/trump-duterte-can-t-stop-philippines-powering-with-6-growth> more than 6 percent until 2018 to rank among
the fastest-growing in the world, according to economists surveyed by Bloomberg. Last quarter’s growth exceeded
China’s 6.7 percent and Vietnam’s <http://www.bloomberg.com/news/articles/2016-09-29/vietnam-s-economy-
expands-6-4-in-third-quarter-on-export-boom> 6.4 percent in the same period. India, which posted growth of 7.1
percent in the second quarter, is yet to publish GDP data for the three months through September.

Gifted with a young population and backed by $50 billion of revenue from remittances and outsourcing, the
Philippines is getting an additional boost from Duterte’s $160 billion-infrastructure plan aimed at creating jobs.
Projects include at least $1 billion of contracts <http://www.bloomberg.com/news/articles/2016-11-16/duterte-
plans-1-billion-airport-rail-for-ex-u-s-base-makeover> to build an airport and a railway to transform a former U.S.
military base into a commercial hub.

Markets

• Philippine stocks rose a second day, climbing as much as 2.2 percent. They were up 1.1 percent as of 11:01 a.m.
in Manila.

• The peso was little changed at 49.32 per dollar.

Analyst Takeaways

• “Philippines will remain an outperformer in the region,” said Rahul Bajoria, a senior economist at Barclays Plc
in Singapore. “It is domestically driven, with consumption holding up quite well and the fiscal spending being
planned. The global risks we’re seeing including to trade won’t fundamentally alter its prospects.”

• “In the short term at least, we expect the economy will continue growing at a decent pace,” Gareth Leather,
senior Asia economist at Capital Economics Ltd. in London, said in a note. “The foundations are in place for
growth to remain strong, but recent political events, both in the US and domestically, have made the outlook
much less certain.”

• “Putting money on infrastructure-related stocks is the smart bet and it’s exactly what I am doing,” said John
Padilla, who helps manage about $9.1 billion at Metropolitan Bank & Trust Co., the Philippines third-largest
money manager. “This growth poses now more challenge for President Duterte to keep the pace. It supports
the view that Philippines needs infrastructure to sustain this growth."

Other Details

• Household spending, which makes up about 70 percent of GDP, rose 7.3 percent from a year earlier

• Government spending gained 3.1 percent

• Investment surged 20 percent

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