* Q4 GDP grows 6.4% y/y, touch below expectations
* 2019 GDP growth lowest in 8 years
* Economic Planning Secy says budget delay tempered 2019
growth
* Central bank says 7% growth attainable this year
By Neil Jerome Morales and Enrico Dela Cruz
MANILA, Jan 23 (Reuters) - The Philippine economy gathered
momentum in the final quarter even though full-year growth slid
to an eight-year low and missed the target, tempered by weakness
in agriculture and the impact of budget approval delays.
Gross domestic product grew 6.4% in the last three months of
the year from a year ago, the statistics agency said on
Thursday, missing the 6.5% forecast in a Reuters poll.
However, it was faster than the previous quarter's revised
growth of 6.0%, thanks to strong domestic demand and government
spending.
That brought full-year growth to 5.9%, missing the low-end
of the government's 6.0%-6.5% expansion target. It marked the
lowest growth in eight years, according to Socioeconomic
Planning Secretary Ernesto Pernia.
Noting weakness in exports, analysts at Capital Economics
say the fourth quarter rebound in growth is unlikely to last,
adding the 6.4% expansion "will be as good as it gets.".
The economy, which grew 6.2% in 2018, remains one of Asia's
fastest growing economies.
The pick up in fourth quarter growth reflected strong
domestic consumption, underpinned by benign inflation, as well
as a faster turnaround in government outlays, which offset weak
farm output and trade. "A full percentage point was lost because of the delay in
the passage of budget. We could have grown close to if not right
smack 7%," Pernia said.
The below-target growth in 2019 may prompt the central bank
to resume easing within the first quarter, either through a cut
in the policy interest rate or banks' reserve requirement ratio,
said Bank of the Philippine Islands economist Emilio Neri.
The Bangko Sentral ng Pilipinas holds its first policy
meeting this year on Feb. 6.
With inflation having averaged 2.5% last year, well inside
the BSP's 2.0%-4.0% target range, the central bank has said it
could afford to resume easing monetary policy this year after
last year's three interest rate cuts totalling 75 basis points.
The government's efforts to catch up with its expenditure
plans, which were delayed by the approval of last year's budget,
have paid off with public spending up 22% in November from a
year ago.
"This key engine of growth is expected to provide further
support for the economy in 2020, assuming no further delay in
budget approval," said Jiaxin Lu, economist at Continuum
Economics.
President Rodrigo Duterte this month signed a record 4.1
trillion pesos ($80.61 billion) budget for this year, up 12%
from last year, ensuring timely funding for an infrastructure
overhaul in the country of more than 105 million people.
Political squabbling in Congress, however, delayed last
year's budget approval by four months, weighing down the
Southeast Asian nation's economic growth.
The government is targeting economic growth of 6.5%-7.5%
this year.
The central bank is optimistic that 7% growth is attainable
this year.
($1 = 50.8600 Philippine pesos)
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