Philippines ‘continues to be outperformer’ after 6.9% growth in Q4 reported

Workers put their hands together as they chant teamwork slogans after finishing a shift at Toyota Philippines manufacturing plant in Sta Rosa, Laguna, south of Manila. The Philippines economy expanded 6.9% in Q4, 2014. Erik De Castro / ReutersShow less

The Philippines economy expanded by 6.9 per cent in the fourth quarter of last year, official data showed, led by growth in in the industrial sector and financial intermediation.

Fourth-quarter growth last year was the highest since fourth quarter of 2010.

The annual growth rate in the three months through December was higher than the 6.3 per cent growth seen in the fourth quarter of 2013 and 5.6 per cent recorded in the third quarter of last year.

Annually, the Philippines economy grew 6.1 per cent last year, versus annual growth of 7.2 per cent in 2013.

The highest rise was recorded in the construction sector in the fourth quarter, up by 20.5 per cent versus a contraction of 5.2 per cent for the same period last year. It was followed in the fourth quarter of last year with expansion in the public administration and defence sector, which grew 10.9 per cent versus a 2.3 per cent contraction in the fourth quarter of 2013.

Annually, the construction sector saw the fastest growth as well, accelerating by 8.5 per cent in 2014.

The Middle east region was the second-biggest source market after the Americas, with $4.35bn of remittances being sent from the region. Remittances from the Saudi Arabia to the Philippines were the highest in the region, with $2.1bn, followed by remittances from the UAE with $1.26bn.

“Despite all concerns regarding global growth, the Philippines continues to be an outperformer,” said Jill Singian, a trader at Bank of the Philippine Islands in Manila. “From the point of view of revenues, a healthy economy is positive. With the Philippines where you have deficit spending, the fiscal picture remains robust.”

The Philippines economy also benefits from remittances from overseas Filipinos who send money back home from places such as the Arabian Gulf region. Remittances contributed to 9.8 per cent of the Asian country’s economy in 2013, according to the World Bank.

Total remittances to Philippines in 2013 reached US$23 billion, up from 7.4 per cent form $21.4bn in 2012, according to central bank figures.

The Philippines is aiming for a fiscal deficit target of 2 per cent of GDP for this year and next, the budget secretary Butch Abad said in Manila on January 7. The shortfall for 2014 will probably be about 1 per cent of GDP, he said. The president Benigno Aquino last month passed a 2015 budget that includes a 15 per cent increase in funding.

Separately yesterday, the Philippine unit of Japan’s Mitsubishi Motors said it will increase output by up to 6 per cent.

Mitsubishi Motors Philippines, the second-biggest car maker in the country by sales volume after Toyota, wants to produce new car models from the new manufacturing plant it inaugurated in Laguna province south of the capital yesterday.

But the plan is dependent on the release of the automotive industry roadmap, said the Mitsubishi Motors president Osamu Masuko.

“We would like to invest in production facilities so we are waiting,” Mr Masuko added.

The company’s overall production will probably reach 17,000 to 18,000 vehicles this year, said the Mitsubishi Philippines president Hikosaburo Shibata. The car maker manufactures Adventure and L300 models locally.

“We are just increasing based on market demand. Production last year is 17,000 units. This year, basically it will be a small increase,” Mr Shibata said yesterday. Output of 18,000 vehicles would represent a 6 per cent rise.

Mitsubishi Philippines’ new production facility, acquired from Ford last year, has a capacity of 50,000 units per year, with an option to increase to 100,000 vehicles.

* with agencies