The country’s top economic managers were the least perturbed when the gross domestic product grew at a disappointing 6 percent in the second quarter of 2018. Finance Secretary Carlos Dominguez III and Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr., after digesting the second-quarter figures, were one in saying that the economy was still robust and that it would recover in the remaining two quarters of the year.
The economy grew 6 percent in the April-to-June period, slower than 6.6 percent in the first quarter and bringing the first half average to 6.3 percent. The figure was below the government’s target range of 7 percent to 8 percent for the year.
Economic managers listed the closures of Boracay and some mining operations, a stagnant agriculture sector, higher inflation and trade imbalance as some of the factors that contributed to the lackluster performance in the first half.
But Dominguez said the economic numbers in the second semester remained “very promising” and that the year’s second-quarter gross domestic product growth of 6 percent was a mere “exception that does not indicate a medium-term trend.”
Domestic demand, he said, was still robust, while investments grew in the first half of this year. The country’s exports of goods and services recovered by a double-digit growth of 13 percent in the second quarter from 6.5 percent in the previous quarter, he added.
The government, according to him, is doing its share to boost the economy. Government expenditures increased by almost 20 percent in the six-month period, the highest first-semester spending effort since 2003. The tax effort of 15.23 percent was the country’s highest first-semester tax effort, he said.
“Our tax effort is now at par with the best-managed economies in the region. It is a tax effort we can very well sustain, especially with the subsequent packages of the comprehensive tax reform program now being deliberated [by the Congress],” Dominguez said.
Espenilla, meanwhile, noted that the Philippine economy was resilient, citing strong macro-economic fundamentals and a prudent fiscal position. The central bank chief said that a relatively high foreign exchange reserves position and the strong banking system were safeguarding the country from external threats.
The 6-percent growth in the second quarter remains among the fastest in Asia. The Philippines, however, must address the weaker links in the economy, especially the agriculture sector, on which a significant portion of the population is still dependent.”‹