The Philippines is one of the few economies in Asia that have registered respectable growth rates in 2015. But government underspending and a weak agricultural sector are stunting the economy’s real potential.
The gross domestic product in the last quarter of 2015 expanded 6.3 percent, bringing the full-year growth to 5.8 percent. The economic growth last year was, indeed, notable despite a challenging environment and the turbulence in the global economy. The pace may have slowed down and missed the government’s ambitious 7 percent to 8 percent goal—the growth is actually the slowest in four years after expanding 6.1 percent in 2014, 7.1 percent in 2013 and 6.8 percent in 2012—and yet, the economy is outperforming neighboring countries.
The government of President Benigno Aquino III could have done more to expand the economy faster, but its policy to rein in spending and failure to address the infrastructure gap have resulted in a controlled growth.
Outgoing Economic Planning Secretary Arsenio Balisacan conceded the challenges and the missed opportunities that could have driven the growth higher.
“Though this is lower than what we targeted for the year, this growth is respectable given the difficult external environment, the onset of El Niño, and the challenges in government spending in the first semester,” says Balisacan.
The Cabinet official cited room for expansion in the business process outsourcing sector toward higher value-added services that require a more diversified set of skills and services. Balisacan could have also blamed the poor state of the country’s international airports. More foreign tourists would have visited the Philippines and increased their foreign exchange spending to provide instant jobs, especially in the provinces.
The real barometer of economic growth is increased jobs and livelihood in the rural areas. The poverty incidence in the Philippines is still high and the gap between the rich and the poor remains wide. Until these are addressed, the GDP figures are meaningless to the ordinary folk.