MANILA--The Philippine economy grew at a quicker pace in the second quarter compared with the first, bolstered by increased government spending and construction activity.
The Philippine Statistics Authority said Thursday gross domestic product in the second quarter rose 5.6% from a year earlier, compared with a revised 5.0% in the first quarter. Growth in the second quarter of 2014 was faster at 6.7%.
The Philippines' second-quarter growth was the third fastest in Asia, behind of China and Vietnam.
In the first half, GDP grew 5.3%, making it more difficult for the government to achieve its target of 7%-8% growth for this year, especially given the impact of an intensifying El Niño on farm output and troubles in China.
"Realistically, achieving even the low end [of the target] now is very much a challenge," said Economic Planning Secretary Arsenio Balisacan. "It is very likely we will scale down the target," he added.
To hit 7%, the economy will have to grow at least 8.7% in the second half of 2015.
Mr. Balisacan said he isn't overly concerned about current volatility in financial markets. "Most of the growth we are seeing is very domestic but growth would have been higher if not for what is happening overseas, " he said.
He said the strong 20% on-year growth in public spending in the second quarter after a 24% contraction in the first helped the economy against the contraction in agriculture due to El Niño.
Services, which account for half of GDP, rose 6.2% on-year in the second quarter while industry was up 6.1% on-year, helped mainly by manufacturing and construction. Agriculture declined 0.5% in the second quarter after rising 1.1% on-year in the January-March quarter.
