The Philippines economy unexpectedly accelerated its growth rate in the second quarter, which reached its levels before the financial crisis in mid-2007. Consumer spending and the state contribute to the growth of gross domestic product (GDP) of the country by 7.9 percent annually. During the first three months of this year Philippine economy also reported high annual growth of 7.8 per cent. The increase was more than expected growth of 6.3 per cent and is the largest of the second quarter of 2007. Philippine economy proved more resilient to slowing world economy in comparison with neighboring Malaysia and Thailand, where growth rates fell in the second quarter. Analysts say the country’s low inflation will allow the Philippine central bank to maintain its liberal monetary policy during this month. The base rate in the Philippines fell to a record low level since 4 percent last year, expectations are that it will not change until the end of this year. This, combined with rapid rates of economic growth is expected to give impetus to the local stock exchange and the Philippine peso. Liberal fiscal and monetary policy is also aimed at raising incomes of the population, as estimated by the World Bank one in four people in the country lives on less than 1.25 dollars a day.
The main stock index in the Philippines PSEi jumped 1.2 percent after good GDP data and the Philippine peso rose over 2% against the U.S. dollar. Interest rates on four-year government bonds fell while at its lowest level in historical perspective. The aim of the Philippine Government is to achieve economic growth of 5 to 6% within this year and another 7-8% next year. In 2009, GDP grew by 1.1% minimum, which is the lowest growth for the past 11 years.