Philippine Q4 GDP growth beats expectations

MANILA - The Philippine economy has finished 2015 on a strong footing, leaving it well positioned to weather a 2016 outlook that is increasingly characterised by uncertainty and divergent domestic, regional and global economic trends, according to ANZ Bank.

In a research report, ANZ says Q4 GDP growth strongly beat market expectations at 6.3% y/y, bringing 2015 growth to 5.8% y/y. Private consumption remained above trend  – averaging  6.1% y/y in 2015 – providing a significant buffer against the ongoing global trade recession.
“The most pleasing aspect of the report, from an expenditure perspective, is clear evidence that Government spending was picking up,” ANZ says.
“Despite the improvement in Government spending in the second half of 2015, the budget deficit still missed its target of 2% of GDP by a wide margin. Nevertheless, the continued improvement in government balance sheets should enable whoever takes control of Malacañang in June to hit the ground running in terms of investment spending, social support and infrastructure development.
“Not surprisingly, such firm domestic expenditure in the midst of a regional trade recession saw net exports detract from growth.

“We continue to assess the structurally strong and secure elements of the economy as allowing the Philippines to potentially grow slightly above 6.5% without generating inflation. Hence, we see no near term monetary policy implications from this impressive growth out-turn.” www.live.anz.com (ATI).