MANILA, Philippines (AP) — The Philippine economy grew 5.8 percent in 2015, short of even lowered government expectations after being hampered by a weak world economy, El Nino and slow government spending in the first half of the year.
The government initially forecast growth of 7-8 percent for 2015 but later lowered its projection to 6-6.5 percent.
"Though this is lower than what we targeted for the year, this growth is respectable given the difficult external environment," Economic Planning Secretary Arsenio Balisacan said Thursday.
The Philippines has been one of the fastest growing economies in Asia for several years. Despite increased government efforts to raise living standards, the country of more than 100 million still faces considerable challenges including its vulnerability to typhoons and other natural disasters, poverty, corruption and poor infrastructure.
The economy expanded 6.3 percent in the last quarter of the year, the fastest for 2015. It was up from 6.1 percent the previous quarter but down from 6.6 percent in the same period of 2014.
Balisacan said growth has averaged 6.2 percent in the past six years, which is the best performance since the late 1970s. The growth has not been due to unsustainable borrowings like in the 1970s and short-lived portfolio capital but fueled by investments that create jobs and increase incomes, he said.
He said last year's growth was driven by much stronger domestic demand and government spending that grew 9.4 percent compared to the previous year's 1.7 percent. Growth in public and private investments more than doubled, primarily led by public construction.
Service industries were also robust, growing 6.7 percent in 2015 from 5.9 percent in 2014. Industry expanded 6.0 percent while agriculture grew a tepid 0.2 percent.
Finance Secretary Cesar Purisima said the Philippines was well-positioned to withstand turbulence in financial markets caused by uncertainty about the strength of the global economy.
He said foreign exchange reserves are more than healthy at $80.6 billion as of the end of last year, enough to cover 10.3 months of imports and equivalent to more than six times the country's external short-term funding requirements.