Philippines posts stellar Q4 growth on construction, farm output

The financial district of Makati City in Manila, Philippines.
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The Philippine economy rebounded more strongly than expected in the final quarter of last year, posting the best growth in Asia after China on strong farm output and construction activity.

The better-than-expected performance puts it on course for solid growth this year and cements expectations the central bank will leave policy rates on hold for some time.

Fourth quarter GDP grew a seasonally adjusted 2.5 percent over the prior three months, the best quarterly pace in Asia and above expectations of 1.7 percent. Growth picked up from an upwardly revised 0.7 percent expansion in the September quarter.

Southeast Asia's fifth-biggest economy grew 6.9 percent in the fourth quarter from a year earlier, far exceeding economists' expectations of 6.0 percent and the strongest in more than a year. That brought growth for the full-year to 6.1 percent, also above market forecasts.

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"Our economy has moved into a long-term growth path; 7 percent is quite sustainable and achievable," Socioeconomic Planning Secretary Arsenio Balisacan told a news conference regarding growth prospects this year.

The weakened against the U.S. dollar while the main stock index was barely changed.

The strong growth numbers support views the central bank will leave its benchmark interest rate steady at 4.0 percent when it meets for the first time this year on Feb. 12.

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Analysts expect the central bank to leave policy settings unchanged in the first half of the year.

The consensus in a Reuters poll was for GDP to expand at a faster clip of 6.5 percent in 2015, but much of the growth this year will depend on the government's ability to spend its 2.6 trillion peso national budget.

Manila has a 7-8 percent growth goal in 2015 and 2016.