Philippine economic growth slows to 6.5 pct in 3Q

MANILA, Philippines (AP) — The Philippine economy slowed to growth of 6.5 percent in the third quarter as weakness in agriculture and other industries offset strong consumer spending.

The government said Thursday that the services sector remained the key source of domestic growth while industry failed to sustain its recovery from the first half.

A decline in agriculture because of a dry spell, diminished government spending after the May election and substantial deceleration in the mining and quarrying industries contributed to the slowdown.

Growth was a lot more robust than 0.2 percent the same time the previous year when the economy was grappling with the global recession but significantly slower than the previous quarter's revised expansion of 8.2 percent.

Economic Planning Secretary Cayetano Paderanga told reporters that growth will continue to moderate but he remained optimistic it would exceed the government's target of 5-6 percent for 2010.

He said the Philippines was growing faster than Indonesia, Malaysia and South Korea but trailing China, Singapore, Vietnam, Thailand and Hong Kong.

Finance Secretary Cesar Purisima said officials are hoping that major infrastructure projects to be launched for government and private sector collaboration can be the key to increase growth and to make it more sustainable.

He said officials are working to address three things that held back the economy in the past — corruption, misguided policies and bureaucracy, and the lack of infrastructure.

The economy grew 7.5 percent in the first nine months of the year compared with 0.7 percent in the same period of 2009.