Malacañang on Thursday expressed confidence that, despite the rising inflation, the Philippine economy will continue to grow as shown by the latest report saying the economy grew by 6.8 percent in the first quarter of 2018″•faster than the 6.5-percent growth recorded in the same quarter last year.
Presidential Spokesman Harry Roque said the economy was growing steadily and would continue to grow under the Duterte administration through increased tax collection and bigger infrastructure spending.
He made the statement even as Socioeconomic Planning Secretary Ernesto Pernia said intervention was needed to address the higher inflation given its implications on consumer prices and economic growth.
“For consumers, we need to address the sources of rising inflation, even if the uptick brought by the temporary effects of TRAIN are expected to gradually ease this year,” Pernia told reporters.
TRAIN, or the Tax Reform for Acceleration and Inclusion Act, was signed into law by President Rodrigo Duterte in December, reducing the personal income tax rate and expanding the value-added-tax base.
Roque cited the report of the Philippine Statistics Authority saying manufacturing, other services and trade were the main drivers of growth in the first quarter.
“We are optimistic that our economic momentum will continue to be sustained with higher tax revenue collection and bigger public spending in infrastructure,” Roque said in a statement.
“Among the major economic sectors, Industry recorded the fastest growth at 7.9 percent,” the PSA said.
“This was followed by Services with a growth of 7.0 percent. Agriculture also grew but at a slower pace of 1.5 percent.”
Growth in the first three months of the year accelerated from the 6.5-percent expansion recorded in the same period last year. The figure marked the 10th straight quarter of growth of at least 6.5 percent but fell short of the government’s target of 7 to 8 percent.
Consumption and investment continued to propel the Philippine economy.
Pernia said rising prices were the main reason the government failed to hit its target for the first quarter.
“Inflation is the spoiler. That’s why we need to really focus on inflation,” Pernia said.
The service sector remained the key driver, accounting for more than half of total output and growing 7 percent. The industrial sector recorded the fastest growth, at 7.9 percent, backed by the continuing expansion of manufacturing.