Philippine economy grows faster than expected at 6.9 percent

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MANILA, Philippines (AP) — The Philippine economy grew faster than expected at 6.9 percent in the first quarter from the same period a year ago, its highest quarterly growth in almost three years, officials said Thursday as the government prepares to hand over leadership to the incoming administration.

Economic Planning Secretary Emmanuel Esguerra said the robust performance shows the economy's continuing high-growth trajectory and increases the likelihood of achieving the official full-year gross domestic product growth target of 6.8 to 7.8 percent.

"The next administration and indeed, the next generation, inherits a rapidly growing, vibrant Philippines cushioned by robust foundations built over six years," said Finance Secretary Cesar Purisima.

The economy grew an average of 6.2 percent over the last six years. The previous quarter growth was 6.5 percent.

Brash-talking Davao city Mayor Rodrigo Duterte won the May 9 presidential race by a landslide based on an unofficial count. The new administration takes office on June 30.

Esguerra said it is important not to miss the current wave of foreign investments in the region, where the Philippines is now a destination of choice. Demonstrating the maturity of its democratic institutions, policy consistency and agreement on a long-term vision are important for sustained business confidence, he added.

First quarter growth was driven by the services sector, which grew 7.9 percent and industry, which recorded its highest growth in five consecutive quarters at 8.7 percent, officials said. Investments also surged, with fixed capital posting 25.5 percent growth. Agriculture contracted 4.4 percent, the fourth consecutive quarter of decline.

The quarter's growth was faster than 11 selected Asian economies, followed by China at 6.7 percent, Vietnam at 5.5 percent, and Indonesia at 4.9 percent, Esguerra said. Purisima said it outpaces China's growth for the first time in 27 years.