The gross domestic product grew 3.4 percent year-on-year in the three months through June, the weakest pace since the fourth quarter of 2008-09. This followed a revised 4.6 percent growth in the previous quarter.
Economists expected the rate of growth to slow to 4.1 percent from the originally reported 4.9 percent expansion for the first quarter. A year ago, the economy expanded 8.9 percent.
Despite the global economic worries, a robust rebound in the agriculture sector and balanced growth of the services sector supported overall growth. The manufacturing sector also contributed positively despite seeing a slowdown from the previous quarter.
The seasonally adjusted GDP rose 0.6 percent quarter-on-quarter, weaker than the 1.2 percent increase expected by economists.
The industrial sector grew at a weaker pace of 3 percent year-on-year compared to a 3.1 percent expansion in the previous quarter as the strong performance of the manufacturing sector, ably supported by mining and quarrying, was negated by a significant contraction in construction output and electricity gas and water supply.
On the demand side, external trade turned in a lackluster performance, while consumer spending and investment contributed positively to GDP growth. The service sector posted 2.4 percent growth for the second quarter compared to 1.3 percent in the previous quarter.
Net primary income in the Philippines declined 2.8 percent from last year on the back of the seething political turmoil in the Middle East and North Africa along with the economic uncertainties in Western countries. This caused the rate of growth in the gross national income to decelerate to 1.9 percent, the lowest in four years, from 9.2 percent in the previous year.
The central bank said last month that the growth prospects for the economy remains bright, while admitting that inflation is a major risk.
The bank was of the view that sustained foreign exchange inflows, driven by upbeat market sentiment over the brighter prospects for the Philippine economy, could accelerate build up of domestic liquidity. This in turn could pose potential risks to inflation, the bank said during its latest monetary policy meeting in July.
Bangko Sentral ng Pilipinas kept its benchmark overnight borrowing rate steady, but raised the reserve requirement rate for banks for a second consecutive meeting, citing upside risks to the inflation outlook.
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