Drought likely hit Philippine growth, says official

Agence France-Presse

Posted at Aug 23 2010 04:59 PM | Updated as of Aug 24 2010 12:59 AM

MANILA, Philippines - Drought likely saw Philippine economic growth slow to below 7.0 percent in the June quarter as the key farming and fishing sectors were hit by the El Nino weather system, the government said Monday.

The National Economic and Development Authority said it is likely to report Thursday that gross domestic product (GDP) grew between 5.9 and 6.9 percent from a year earlier in the quarter.

Economic output expanded 7.3 percent in the three months to March as consumer spending perked up, boosted by politicians giving money to Filipino voters in campaigning ahead of the May 10 elections.

"Higher growth, however, would have been constrained by the negative impact of the El Nino on agriculture and fisheries," the government agency said in a statement.

Last week the agriculture department said farm output fell 2.59 percent in the first half due to El Nino, a cyclical warming of surface ocean temperatures that affects rainfall patterns of countries on both sides of the Pacific Ocean.

The farm and fisheries sectors together account for about a fifth of the Philippine’s GDP.

The economic planning office said manufacturing and exports were the likely drivers of growth in the second quarter, along with improved investor and consumer confidence following peaceful elections.

It expects growth of between 5.0 and 6.0 percent this year, compared with 5.1 percent over the past nine years, before rising to between 7.0 and 8.0 percent next year as new President Benigno Aquino III's reforms take hold.