GDP Update: A big miss

Philippine economic growth slowed in the fourth quarter, as government spending including public construction continued to contract, and household consumption growth slowed down.

Gross domestic product (GDP) grew 3% year-on-year last quarter, bringing the full-year average to 4.4%, below the government’s target of 5.5%-6.5% for the year.

Subpar growth may warrant further monetary easing by the Bangko Sentral ng Pilipinas (BSP) this year.

Key points

• On the demand side, annual household consumption growth slowed even further, while government spending including public construction logged an even greater contraction.
• Meanwhile, trade remained supportive of the economy, as export growth outpaced import growth.
• On the sectoral side, the services sector also saw slower growth, while the industr