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Philippine Gdp Growth Slows To 5.3% On Government Spending

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Philippine growth unexpectedly slowed to the weakest pace since 2011 as government spending fell, countering gains in private consumption and industrial production. Stocks slipped.

Gross domestic product increased 5.3 percent in the three months through September from a year earlier, the Philippine Statistics Authority said in Manila today, after rising 6.4 percent in the previous quarter. That is lower than all estimates of 24 economists in a Bloomberg survey.

Weak government spending is putting at risk President Benigno Aquino’s goal of boosting annual expansion to as much as 8.5 percent by 2016, when his term ends. The Philippines joins neighbors including Malaysia and Indonesia in reporting slower growth last quarter as a global recovery falters.

“Underspending by government is one cause of slower growth,” Joey Cuyegkeng, an economist at ING Groep NV in Manila, said before the report. “Weak agriculture performance is another.”

And conversely...


Philippine President Benigno Aquino is lifting millions out of poverty and boosting the middle class even as he struggles to increase government spending. Ayala Corp. (AC) is reaping the gains.

The nation’s oldest family-controlled company has more than tripled its capital spending in the past five years to expand its property, banking and infrastructure units and cash in on one of the fastest expansions in Asia. Businesses are counting on structural reforms, a young population and rising remittances to keep their revenue surging, while wrestling with port logjams and delayed project rollouts.

“There are shifts in consumption patterns as the middle class expands, which provide a lot of opportunities for the group,” Ayala Chief Financial Officer Delfin Gonzalez said in an interview in Manila this week, pointing to growing demand for homes, cars and loans. “We’re going full steam ahead.”

Rising consumer spending, which accounts for about 70 percent of the economy, increases the chance that the growth momentum can be sustained even if investment slows. Gross domestic product will rise about 6 percent every year at least through 2019, the International Monetary Fund predicts, the longest such stretch since the 1950s post-war boom, according to data compiled by Bloomberg based on official figures.

The economy expanded 5.3 percent in the three months through September from a year earlier, data showed today, slower than all estimates in a Bloomberg News survey, and the weakest pace since 2011. GDP grew 0.4 percent from the previous quarter.

Consumer spending dependent on govt spending?

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Seems to me that all modern economies are reliant on Government spending to take up the slack of ageing populations stashing the cash, not least the UK. I have a problem with it because it creates an unequal Society, doesn't really help a young person with no Aunty Edna to pass on her half million pound gilt portfolio, instead he will be stuck paying the interest. Social justice on health and pension spending is actually enslavement of the young who have no Aunty Edna. Guess most politicians do.


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