The Philippines' chief economic planner warned yesterday that political attacks against President Gloria Macapagal-Arroyo following last month's failed mutiny could dampen business confidence and hurt growth prospects in the second half of the year.
The warning by Romulo Neri, economics secretary, came as the government announced that gross domestic product (GDP) in the second quarter rose by only 3.2 per cent from a year earlier, well below the previous quarter's 4.5 per cent rate. The second quarter numbers disappointed investors, with the Manila stock market closing 2 per cent lower.
A prolonged drought slowed the expansion in farm output, while the Iraq war and the spread of the Sars virus weakened demand for Philippine exports, made up largely of electronic components. The government also cut spending to control the budget deficit, contributing to slower growth.
