Philippine economy thrives amid testing times

GDP jumped 5.5% despite depressing global economy.

According to Moody's Analytics, the Philippine economy continued to grow through the September quarter, despite a weak global environment. The country's GDP increased an estimated 5.5% y/y, only slightly below the second quarter’s 5.9% pace.

Here's more from Moody's Analytics:

The Philippines is expanding above its long-run potential rate thanks to strong government spending and foreign direct investment, which have offset weakness in exports.

Also working in the country's favour is a thriving services sector, which accounts for just more than half of GDP and has been growing at an average 6% annual rate for the past 10 years. Business process outsourcing has been a recent driver, boosted by the government's active encouragement of foreign investment.

The often volatile agriculture sector took a hit in the third quarter as bad weather caused significant damage to crops. The Philippines experiences 20 typhoons a year on average, and the storms tend to be concentrated in the third quarter.

On the upside, remittances strengthened a little as foreign demand for Filipino labor remained resilient through global headwinds. Remittances were up 5.9% year to date in September over the same period in 2011. This was better than expectations, as remittances barely rose during the global downturn.