Philippines shows strong Q2 growth

By CNN's Rufi Vigilar

MANILA, Philippines -- The Philippines has posted second-quarter economic growth figures higher than government and business sector estimates.

Gross domestic product grew by 3.3 percent year-on-year in the June quarter, above the March quarter figure of 3.2 percent and higher than most estimates of between 2.8 to 3.0 percent.

The Philippines was the only country in the region to enjoy higher economic growth in the April to June period, Dante Canlas, director general of the National Economic Development Authority (NEDA), said Thursday.

"Growth of domestic demand underpinned the second quarter growth," Canlas told a news conference Thursday.

Gross national product grew by 3.5 percent, up from 3.3 percent in the previous quarter.

Manila predicting 3.3 to 3.8 percent in 2001

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The government is predicting GDP growth of between 3.3 to 3.8 percent this year, slightly lower than last year's 4.0 percent figure.

Despite positive second-quarter growth, Canlas warned that the "rapid economic decline of our neighbors in East and Southeast Asia" amid a global slowdown may affect the country's economic targets for the year.

The Philippines' second-quarter growth was achieved despite a slump in exports.

Semiconductor exports, which make up almost 15 percent of total exports, fell by 31.1 percent in the second quarter, the National Statistical Coordination Board told CNN.

Statistical coordination officer Rhoda Magsombol said the semiconductor export slump in the first quarter was only 1.3 percent.

Exports of finished electrical machinery, which makes up 9.56 percent of total exports, also dipped by 18.4 percent.

Canlas also said the government of President Gloria Macapagal-Arroyo will "adhere to a responsible budget deficit reduction program to ensure a stable and sound macroeconomic environment."

The government has kept the budget deficit level at $1.6 billion (Pesos 82.6 billion) in the first seven months of 2001, which is $216 million (Pesos 11.0 billion) lower than the programmed deficit.