US economy grew 2.5% in Q2



WASHINGTON, USA – The US economy grew at an annual rate of 2.5% in the second quarter, the Commerce Department said Thursday, September 26, leaving its prior estimate unchanged.

Analysts had expected that second-quarter gross domestic product (GDP) expanded at a slightly stronger 2.6% pace.

The world’s largest economy grew 1.1% in the first quarter.

“With the third estimate for the second quarter, the general picture of economic growth remains largely the same,” the Commerce Department said.

Revisions offset each other in the data, leaving last month’s estimate unchanged.

Inventory investment was lower than previously estimated, amid weaker spending by food and beverage stores and information industries.

Exports of goods and services also were revised lower.

But state and local government spending was revised upward, particularly in investment in structures.

Overall, the pace of economic growth in the April-June period was lackluster and well below the momentum needed to boost job growth.

Analysts expect that growth slowed sharply in the current third quarter that ends Monday.

Macroeconomic Advisers puts the third-quarter pace at 1.7%, while Moody’s Analytics revised down its tracking estimate to 1.4% Wednesday after weaker-than-expected durable goods orders and new-home sales.

The Federal Reserve last week cut its growth forecast for this year to 2% to 2.3% as it unexpectedly announced it would keep an open throttle on its easy-money policy.

Fed Chairman Ben Bernanke said that the central bank could still begin reducing its $85 billion a month bond purchases, known as quantitative easing (QE) in the next 3 months, but only if the outlook for the economy strengthened.

READ: Fed leaves stimulus unchanged at $85-B, no taper

“If the data confirm our basic outlook, if we gain more confidence in that outlook… then we could move later this year,” he said after a two-day Federal Open Market Committee policy meeting.

READ: Fed cuts 2013-2014 US economic growth forecast

The Fed’s preferred measure of inflation — the personal consumption expenditures (PCE) price index for goods and services — fell 0.1% in the second quarter, according to the Commerce Department data.

“Worryingly, it looks like even this relatively modest growth is only being achieved by firms cutting prices,” said Chris Williamson, chief economist at Markit.

“That was the first time these prices have fallen since the dark days of early 2009 and points to a general lack of demand growth.” –


US stocks rally as Q2 growth estimate hiked

POSTED ON 08/30/2013 10:31 AM

STOCKS UP. The Dow Jones rises following an upgrade to the 2nd-quarter GDP growth of the US. Photo by AFP

STOCKS UP. The Dow Jones rises following an upgrade to the 2nd-quarter GDP growth of the US. Photo by AFP

NEW YORK CITY, United States – US stocks Thursday (Friday, August 30 in Manila) closed higher following an upgrade to US 2nd-quarter economic growth and a shift in expectations away from an immediate military strike on Syria.

The Dow Jones Industrial Average rose 16.44 (0.11%) to 14,840.95.

The broad-based S&P 500 added 3.21 (0.2%) at 1,638.17, while the tech-rich Nasdaq Composite Index increased 26.95 (0.75%) to 3,620.30.

US economic growth in the second quarter came in at an annual rate of 2.5%, faster than the original estimate of 1.7%, the Commerce Department said.

Stronger consumer spending and exports underpinned the pickup from the first quarter’s sluggish 1.1% pace, while imports grew more slowly than originally estimated, the department said.

In addition, market watchers have been calmed by an apparent shift from the US and other western powers in the timing of any military strike against Syria in response to its alleged chemical warfare attack on its people.

“There just seems to be less urgency about an attack any time soon,” said Alec Young, global equity strategist for S&P Capital IQ. “The stress level has come down a little.”

Dow component Verizon rose 2.7% after British telecommunications giant Vodafone said it is in talks regarding a possible sale of its stake in Verizon. The stake is said to be worth more than $100 billion. Vodafone’s US-traded shares rose 8.1%.

Oil giants Exxon Mobil and Chevron, both components of the Dow, fell 1.8% and 1.2% as oil prices retreated on diminished Syria anxiety.

Microsoft, another Dow component, gained 1.6% on reports that the tech giant is considering a strategic investment in Foursquare, which provides recommendations on restaurants and other services by geographic area.

Fashion house Guess surged 12.9% after forecasting full-year earnings in the range of $1.78-$1.92 a share, whereas analysts currently project earnings of $1.80. Results in North America were strong, but Southern Europe remains “challenging” and the company is “beginning to see a slowdown in China,” it said.

Bond prices rose. The yield on the 10-year Treasury bond fell to 2.75% from 2.78% late Wednesday, while the 30-year dropped to 3.7% from 3.75%. Prices and yields move inversely. –


PH matches China’s 7.5% growth in Q2

POSTED ON 08/29/2013 10:00 AM  | UPDATED 08/29/2013 2:40 PM


MANILA, Philippines (4th UPDATE) – The Philippines remained the fastest-growing economy in Southeast Asia with a gross domestic product (GDP) growth of 7.5% in the 2nd quarter, the National Statistical Coordination Board (NSCB) announced Thursday, August 29.

Driven by the resilient services sector and improvements in manufacturing, Socioeconomic planning secretary Arsenio Balisacan said the Philippines’ April-to-June economic expansion was at par with thegrowth of regional powerhouse China.


The Philippines’ 2nd-quarter growth was slower than the 7.7% revised growth recorded in the first.

But Balisacan said it was “significant” because it marked the 4th consecutive quarter that the country grew above 7%.

Economic growth in the first half stood at 7.6%, faster than the 6.4% achieved in the first half of 2012, NSCB secretary general Jose Ramon Albert announced.

A ‘rebalancing’ in process

The local economy was still dependent on the services sector, which accounted for 57.9% of GDP. Industry sector’s share was 32.7%, and agriculture, the top employer, contributed 9.4%.

Trade and real estate supported the services sector, which grew 7.4%.

Trade rose 7.3%, while real estate, renting and business activities posted a 9.5% growth, indicating continued expansion of business process outsourcing, said Albert.

Services have also been consistently fueled by consumption-led economic activities and, recently, investments by overseas Filipino workers (OFWs).

Remittances have remained strong despite fiscal issues faced by western countries that host most of the OFWs, but growth has slowed down.


While the services sector lifted the economy the most by contributing 4.3 percentage points to the overall 7.5% growth, the spotlight was on the industry sector, which has been picking up.

The Philippines, dragged by high energy prices, restive labor and regulated wages in the past decades, is getting back in the radar of job-generating investors, noted Balisacan.

“The composition of our growth shows signs of an economy that is in the process of rebalancing, moving from being largely consumption-driven to becoming investment-led and industrialized, with the ability to provide high-quality jobs for Filipinos,” he said.

“For the past 3 quarters, capital formation has been growing more rapidly than household consumption and the growth of industry has so far outpaced that of the services sector. Notable are the double-digit growth rates in fixed capital and the manufacturing subsector in the last quarter,” he added.

Industry grew an impressive 10.3%, and contributed 3.3% percentage points to the GDP number. Construction, which stepped up again during the quarter, grew by a whopping 17.4%.

Balisacan said construction will remain key driver in coming years. “In all major forms of infrastructure, we have huge backlog.”

Manufacturing grew 10.3%, maintaining the industry’s recovery, which started a few quarters ago, when Japanese, Korean, and other foreigners decided to plow their job-generating investments back into the Philippines after heavy flooding in Thailand and the earthquake-tsunami disaster in Japan.

Balisacan said, “with the rebound of industry sector, stable and productive jobs will be generated. He added persistent unemployment will also be addressed.

“Within manufacturing, food processing, furniture and household appliances like radio and TV, basic metals, and machinery posted significant growth, indicating greater use of skilled labor,” he noted.

How the Philippines’ impressive GDP growth rate is translating into jobs is a major concern among analysts and economists watching the country.


Agriculture, mining

Agriculture, which remains the main employer in the country, performed poorly. For the first time since the first quarter of 2012, the sector contracted. Its 0.3% decline pulled down the GDP by 0.03 percentage points.

The officials attributed this to the 25.9% contraction in corn output and 1.8% decline in palay. These “may be due to the intense heat experienced in Ilocos and Cagayan Valley regions and farmers harvesting their crops in advance in anticipation of the drought,” Balisacan explained.

About 624,000 jobs were lost in agriculture-related activities, compared to about 224,000 and 380,000 additional jobs generated in the industry and services sectors, respectively. Balisacan cited the April 2013 labor force survey for these indicators.

“The seasonality in the agriculture sector poses a challenge to growth and employment, and this is why we will need to diversify agricultural production and move towards further processing of agricultural products, particularly food,” he stressed.

Mining and quarrying remained laggards, declining by 2.7% during the quarter. This reflected investors decisions to cut on their investments as the Aquino government reviews and pursues legislative reform on the revenue-sharing scheme between government and the mining industry.

Recently, the global miners behind Tampakan gold-copper mine in South Cotabato in Mindanao decided to downsize pre-commercial operations. The investment in the mine, which is supposed to start operations after President Benigno Aquino III steps down in 2016, is potentially the country’s biggest foreign investment with operators planning to put in up to US$5.9 billion, which in turn is expected to boost the Philippines’ GDP by 1% every year.

Govt, household spending

On the demand side, household and government spending as well as construction were the key growth drivers.

Household consumption, which contributed 3.6 percentage points to growth, rose 5.2% in the second quarter.

Government spending (2 percentage points contribution to growth) surged 17%, while construction (1.3 percentage points) rose 15.6%.

Election, 2013 targets

The mid-term polls in May, which were expected to boost spending, did not materially contribute to economic growth.

Balisacan said election spending played a “minimal role” in the second quarter.

Albert said presidential elections are usually the ones that have big impact to the economy.

With the 2nd-quarter growth, Balisacan said the 6% to 7% target for 2013 will likely be surpassed.

Officials are aiming to hit a growth rate of 7% to 8% every year until 2016 to lift more out of poverty and provide more jobs. – with reports from Judith Balea,

Forex reserves climb to $82.9 B




By Prinz P. Magtulis (The Philippine Star) | Updated August 8, 2013 – 12:00am



MANILA, Philippines – The country’s foreign exchange reserves climbed in July after three straight months of decline on higher gold prices and continued inflow of dollars, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Citing preliminary data, BSP Governor Amando M. Tetangco Jr. said the country’s gross international reserves (GIR) rose 2.08 percent to $82.942 billion in July from $81.255 billion in June.

The latest figure was a recovery from a 10-month low in June, but still below the record-high of $85.274 billion recorded in January this year.

“The increase was due to BSP’s foreign exchange operations and some revaluation gains at least for last month,” Tetangco told reporters on the sidelines of a budget briefing in Congress.

According to the central bank, reserves are now good to meet one year of imports of goods and services. They are also equivalent to 8.5 times the country’s short-term debt based on original maturity and 5.8 times on residual maturity.

Broken down, gold holdings posted the highest increase of 7.27 percent after it slumped to a two-year low the previous month. As of July, the value of gold reserves totaled $8.221 billion.

his was followed by foreign investments, where the bulk of the GIR is placed. A total of $71.760 billion were invested offshore, 1.58 percent up from end-June’s $70.645 billion.

Foreign exchange coffers – composed mainly of major currencies such as the dollar, euro and Japanese yen – inched up 0.84 percent to $1.155 billion for the first seven months.

Tetangco said the BSP’s foreign exchange was boosted by “foreign currency deposits from the Treasurer of the Philippines” as well as the “revaluation” of current holdings, primarily to account for stronger foreign currencies.

“These inflows were partially offset by the payments for maturing foreign exchange obligations of the national government,” he explained.

GIR is also composed of special drawing rights (SDR) – the currency used by the International Monetary Fund – as well as those funds actually lent to the multilateral agency.

Based on official figures, SDR holdings kept steady as of July at $1.261 billion, but the amount with the IMF increased 0.9 percent to $545.01 million.

China trade surplus falls 29.6% as imports gain

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POSTED ON 08/08/2013 12:05 PM  | UPDATED 08/08/2013 12:11 PM

This general view shows a central business district in Beijing. AFP PHOTO / WANG ZHAO

This general view shows a central business district in Beijing. AFP PHOTO / WANG ZHAO

BEIJING, China – China’s July trade surplus fell 29.6% year-on-year to $17.8 billion, government data showed Thursday as import gain outpaced exports.

Exports increased 5.1% year-on-year to $186.0 billion, according to figures from Customs, while imports rose 10.9% to $168.2 billion.

The results marked a rebound in both exports and imports after they had declined in June, with the gain in imports being the first since April.

The trade data come after mixed messages on China’s economy last week when private and official surveys of the country’s important manufacturing sector showed differing results.

British banking giant HSBC’s purchasing managers’ index indicated contraction while the government’s showed a surprise expansion.

China’s economy managed growth of 7.8% in 2012, its slowest since 1999.

The economy has since weakened further, with growth in the April-June period dipping to 7.5%, from 7.7% in the first quarter and 7.9% in October-December. –

S&P: PH leads ASEAN growth

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POSTED ON 08/07/2013 1:53 PM  | UPDATED 08/07/2013 2:58 PM



MANILA, Philippines – The Philippines is now Southeast Asia’s economic growth leader, taking over Indonesia, according to credit rating agency Standard & Poor’s (S&P).

In a report released on Monday, August 5, S&P said the Philippines’ gross domestic product (GDP) is expected to expand by almost 7% in 2013.

This is higher than the 5.5% collective GDP growth forecast for ASEAN countries — Indonesia, Malaysia, Philippines, Thailand and Vietnam.

“The Philippines, which S&P recently upgraded to investment grade, has taken over the ASEAN growth leadership role from Indonesia. We project Philippine GDP to expand by almost 7% this year, moderating to 6%-6.5% in 2014 and 2015,” S&P said.

The country grew 7.8% in the first quarter.

ASEAN outperforms other AsiaPac economies

Strong domestic trading in ASEAN countries, S&P said, allows the region to outperform other economies in the Asia-Pacific region.

“The more domestically oriented economies in ASEAN continued their trend after the global financial crisis by outperforming the trade-dependent, newly industrialized economies of Hong Kong, Korea, Singapore and Taiwan,” the agency noted.

S&P also said that Southeast Asia is also more resilient to the economic slowdown brought about by the declining pace of investments in China and weak global trade.

“These economies are more domestically focused than the newly industrialized economies and therefore tend to do better when global growth is sluggish.”

The rating agency lowered its growth forecasts for Asia-Pacific 5.3% from 5.5% for 2013, and 5.6% from 6% for 2014, on the account of slower demand from Europe and China’s weak economic performance. –