According to the latest issue of Market Call released by First Metro Investment Corporation and University of Asia and the Pacific, Philippine's economic growth probably exceeded 5% in the third quarter of 2011, on the back of a rebound in industrial output as shown by higher demand for electricity by factories.

Economists from the two institutions noted the strength of the industrial sector, despite weak electronics exports, the continuing upsurge in residential construction, and higher national government spending in the third quarter.

The report said that "We expect a better than 5% uptick in the quarter that could hold on until the end of the year, depending on how domestic investors react to the slower growth. The national government is in better position to stimulate the economy in second half as its January to August 2011 period deficit is only PHP 34 billion compared to the target of PHP 293 billion."

Gross domestic product grew just 4% in the first half, prompting the International Monetary Fund to downgrade its projections for the country.

Economists, however, said the second half should draw strength from robust industrial growth, continuing job creation, improved fiscal situation and easing of inflationary pressures.

The report noted that in August 2011, industrial electricity sales increased by 11.5%, following an 8% gain in July. This carried total electricity sales to positive growth for two consecutive months in the third quarter. Total power sales by distributor Manila Electric Co rose 4.4% in August 2011, after climbing 1.3% in July.

It said that "The two consecutive months of gains reflect a reversal of March to June negative year on year growth rates of Meralco sales during the first half of 2011. These continuous improvements are in line with our expected faster GDP growth in the second half."

(Sourced from www.manilastandardtoday.com)