Philippines sees growth rate slow in second quarter
Electronics exports from Philippines have been hurt by a slowing global demand
The Philippines economy grew at a slower pace in the second quarter as a fall in global demand hurt its exports and industrial output.
Growth was 5.9% in the April to June period, compared with a year ago. That is down from 6.3% annual growth in the first quarter.
Compared with the previous three months, the economy expanded by just 0.2%.
Growth was also hurt by a slowdown in the farming and services sectors.
However, analysts said that strong domestic demand had helped cushion the impact of a dip in foreign sales.
"Even though we're seeing a lot of headwinds from external demand and we have seen exports going sideways, this has been offset by non-electronics exports and it has also been supported a lot by domestic demand," said Eugene Leow, an economist with the DBS bank.
Growth boost
The slowdown in markets such as the US and eurozone has hurt demand for Philippines exports.
Shipments from the country rose 4.2% in June from a year earlier, compared with 19.7% annual growth in May.
Continue reading the main story “ Start Quote There is definitely room to further cut rates if needed” End Quote Eugene Leow DBS
Concerned over the impact of the global economic uncertainty on its economy, the Philippines central bank has already cut interest rates three times this year in a bid to sustain growth.
The latest cut, announced late last month, saw the bank lower its key rate to a record low of 3.75%.
Analysts said that policymakers had enough room to take further measures if the growth continued to slow.
They said that any rise in consumer prices due to the recent floods was likely to be temporary and as a result the inflation was expected to remain low.
"There is definitely room to further cut rates if needed," said Mr Leow of DBS bank.
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The  economy grew by 5.9%, annual rate, during the second quarter of 2012 which is less than the first quarter's figure of more than 6% annual rate, as reported by . According to  , strong domestic demand from the services sector and spending from money remitted by expatriate Filipinos helped boost the nation's economy despite the ongoing . 

In spite of this growth, numerous risks still lurk around the corner, said Balisacan. He said that changes in  and the  remain as the biggest challenges to the economy. Balsican also noted that poor infrastructure may also have a negative impact although spending on infrastructure, which may cost nearly $200 million in investment, may contribute to growth.

The Philippines central bank has cut key interest rates three times already this year in order to continue this economic expansion. Analysts, such as economist Eugene Leow of -based , agree that, "There is definitely room to further cut rates if needed," in order to promote further growth.



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