According to the Philippine Statistics Authority, the Philippine economy expanded by 6.0 percent in the second quarter of 2018.
“That is the real growth rate. Putting this in a bigger perspective, nominal GDP growth is 9.6 percent. Although this growth still puts the Philippines as one of the best-performing economies in Asia, just after Vietnam at 6.8 percent growth and China at 6.7 percent growth, and ahead of Indonesia’s 5.3 percent, this growth rate is less than what we had hoped for,” Socioeconomic Planning Secretary Ernesto Pernia said.
Given the 6.0 percent GDP growth outturn, as well as the downward revision of the first quarter GDP, the Philippine GDP growth for the first six months of the year is at 6.3 percent.
“This implies that the Philippine economy would have to expand by at least 7.7 percent in the second semester to attain the low-end of the 7.0 to 8.0 percent for 2018,” Pernia said.
“To be fair and put things in proper context, the slowdown is partly due to policy decisions undertaken that are expected to promote sustainable and resilient development,” Pernia said.
Pernia was referring to the temporary closure of Boracay Island from April to October 2018, which partly made a dent on the economy with growth in exports of services slowing to 9.6 percent in the second quarter from 16.4% in first quarter.
Pernia also referred to regulations in the mining sector – the closure of several mining pits and the excise tax on non-metallic and metallic minerals – so that mining and quarrying sector showed a lackluster performance.
“It is down by 10.9 percent. Moreover, the stricter enforcement of regulations on aquaculture producers at Laguna Lake resulted in the drop of freshwater fish catch,” Pernia said.
While headline inflation has risen in the past six months, the month-on-month numbers showed a downward trajectory so that inflation should moderate by the end of the year in line with the forecast of the BSP.
And despite the price pressures, domestic demand remained buoyant at 10.1 percent – driven by household consumption and investments.
The timely implementation of the Build, Build, Build program bodes well with the construction industry and is seen to boost not only public construction but private builders as well.
In the services sector, the immediate facilitation of the possible entry of a third player in the telecommunications industry will enhance the efficiency of communications, and support the growth of small business, particularly retail trade. Further, the resumption of tourism activities in Boracay Island by October gives us good reason to be bullish about prospects for tourism and other service sectors in the fourth quarter.
“The government remains committed to making growth inclusive. We hope to have the continued support of the Department of Agriculture and the Department of Trade and Industry – and my fellow economic managers from the Department of Finance, Budget Department and the Bangko Sentral ng Pilipinas – and our friends in the media, in our effort to translate this growth into what we have been referring to as the matatag, maginhawa at panatag na buhay para sa lahat,” Pernia said.