Economic growth picked up to 6.5 percent in the second quarter from 6.4 percent in the first quarter, lifted by the sustained strength of the industry sector and the recovery of agriculture, the Philippine Statistics Authority said Thursday.
The growth in the quarter covering the months of April to June, however, was slower than 7.1 percent recorded in the same period last year, when the presidential election was held. Growth in the first half averaged 6.45 percent this year, also slower than 6.95 percent registered a year ago.
“The [GDP] target [of 6.5 percent to 7.5 percent this year] remains realistic,” Economic Planning Secretary Ernesto Pernia said in a news briefing, adding that the Philippines continued to be one of the fastest growing economies in Asia.
The country’s second-quarter expansion was faster than Vietnam’s 6.2 percent and Indonesia’s 5 percent.
ING Bank Manila senior economist Joey Cuyegkeng said the GDP growth target of 6.5 percent to 7.5 percent remained within reach, as some acceleration of economic activity was expected in the second half.
“Negative base effects would have faded while household and business spending and investments supported with an acceleration in core government spending would continue to support strong economic activity,” Cuyegkeng said.
Cuyegkeng said an export recovery would also deliver a more favorable contribution although agriculture might post a moderate growth in the third quarter from the Avian flu outbreak in Pampanga.
The net primary income from the rest of the world grew 8.6 percent. As a result, gross national income posted a 6.8-percent growth.
“With the country’s projected population reaching 104.5 million in the second quarter of 2017, per capita GDP grew by 5 percent. Meanwhile per capita GNI and per capita household final consumption expenditure grew by 5.3 percent and 4.4 percent, respectively,” the PSA said.
Pernia said he expected the economy to remain resilient to risks, such as the Marawi conflict in Mindanao, the recent bird flu outbreak in Central Luzon, and even the weakening peso.
“The peso is not a concern … as long as we are able to manage the fluctuation and minimize wild movements, I think we should be okay,” he said.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said the second-quarter data confirmed that the economy remained robust and in line with BSP’s expectations.
“The firm economic momentum during the first half of the year alongside favorable business and consumer sentiment should augur well for the expansion of the economy over the near to medium term,” Espenilla said.
Finance Secretary Carlos Dominguez III said the 6.5-percent expansion in the second quarter was a “solid proof” that the government’s “unparalleled” investment strategy anchored on the “Build, Build, Build” program had started to pick up steam and was on course to steering the Philippine economy towards a growth path of 6.5 percent to 7.5 percent for 2017.
“With the upturn in state spending beginning in the year’s second quarter, President Duterte’s unparalleled investment strategy anchored on the ‘Build, Build, Build’ program has started to pick up steam,” Dominguez said.
Under its expansionary fiscal policy, the Duterte administration aims to raise infrastructure spending from an equivalent of 5.4 percent of GDP this year to 7.3 percent of GDP by 2022. It budgeted P1.097 trillion in 2018 to support the “Build, Build, Build” program, up from the adjusted level of P858.1 million this year.
Dominguez expressed hope the Senate would help the government meet the high growth target by passing soon”•and in full”•its own version of the comprehensive tax reform package.
“Hence, we are hoping that our senators share our confidence in the robust growth prospects of our economy and would pass soon enough”•and in full”•its version of Package 1 of the Train [Tax Reform for Acceleration and Inclusion Act], which the House of Representatives already passed in May this year,” Dominguez said.
The Philippine Statistics Authority said among the major economic sectors, industry recorded the fastest growth in the second quarter with 7.3 percent. Services slowed down to 6.1 percent from 8.2 percent a year ago. Agriculture recovered with 6.3 percent growth from the 2-percent contraction in the previous year.
The International Monetary Fund earlier cut its growth forecast for the Philippines this year to 6.6 percent from an earlier estimate of 6.8 percent. IMF mission chief Luis Breuer, who visited Manila on July 26 to Aug. 9, also said growth projection in 2018 was reduced to 6.8 percent from 6.9 percent previously.
