Higher growth trajectory: PH among Asia’s fastest growing economies

The Philippines’ economic growth of at least 6 percent for 14 consecutive quarters suggests that country is on “a higher growth trajectory” as one of the fastest growing economies in the whole of Asia, according to Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) Director General Ernesto Pernia.

Pernia said the country’s third-quarter economic growth followed Vietnam’s 7 percent and China’s 6.5 percent, and way ahead of Indonesia’s 5.2 percent.

Pernia is optimistic the domestic demand will shift to high gear again in the fourth quarter due to the holiday season, as the government continues addressing upward pressures on prices, especially on food.

Pernia cited the issuance of Administrative Order No. 13 streamlining procedures covering the importation of food products.

“From the previous years, fourth-quarter consumption spending normally picks up quite a bit,” Pernia said.

Inflation remained at 6.7 percent in October 2018, but eased month-on-month by 0.3 percent since it peaked in August.

Philippine Statistics Authority (PSA) head Lisa Grace Bersales said “for Metro Manila, inflation is slowing down so we would expect this to encourage more household consumption expenditure at least for Metro Manila.”

The PSA reported that services had the highest contribution to the overall growth in the third quarter with 4.1 percentage points, followed by industry with 2.1 percentage points.

Pernia, said the economy would have grown “easily between 6.5 to 7 percent” in July to September if inflation did not increase.

The agriculture sector, however, pulled down the growth by -0.03 percentage points.

Pernia attributed the weakness of the agricultural sector to the highly-regulated trading regime, and several typhoons that delayed the planting decisions of the farmers.

“As we have been saying, the more robust solution is to reform the legal framework surrounding agricultural development and agricultural trade, especially on rice and sugar,” Pernia said.

Pernia said the economy needs to expand by at least 7 percent in the fourth quarter to achieve the low-end of the government’s target of 6.5 to 6.9 percent growth rate for 2018.

The GDP accelerated 6.2 percent in the second quarter this year, and 7.2 percent in third quarter in 2017.

“The recent resumption of activities in Boracay (Island) will boost services growth over the medium term,” Pernia said. (Source:Leslie Gatpolintan, Philippine News Agency)