The Philippine economy expanded 6.9 percent year-on-year in the first quarter, the fastest in nearly three years, as the robust growth of services and industry sectors made up for the contraction in agriculture output.
“This robust performance of the economy increases the likelihood of achieving the official GDP [gross domestic product] growth projection of 6.8 to 7.8 percent for full-year 2016, despite the weak agriculture and fishery sector,” Economic Planning Secretary Emmanuel Esguerra said in a news briefing in Quezon City.
Data from the Philippine Statistics Authority showed the GDP growth in the first quarter was faster than 6.5 percent in the fourth quarter and 5 percent in the first quarter of 2015. The economy grew 5.9 percent in 2015.
“We are leaving the Philippines in a much better place than when we first found it. The long night of vicious cycles is over,” Finance Secretary Cesar Purisima said.
Purisima said this marked 69 straight quarters of growth and 17 consecutive quarters of at least 5 percent of GDP expansion. “The running 6-year growth average of 6.2 percent percent is our fastest streak since 1978,” he said.
Purisima said the 6.9-percent growth in the first quarter was also the fastest among the five largest economies of the Association of Southeast Asian Nations and outpaced the 6.7-percent growth of China, the first time in 27 years.
The gross national income, which factors in remittances from other countries, grew 7.6 percent in the first quarter, the highest since the third quarter of 2013.
“With the country’s projected population reaching 102.6 million in the first quarter of 2016, per capita GDP grew by 5.2 percent from 3.2 percent in the same quarter of 2015. Per capita GNI grew by 5.8 percent and per capita household final consumption expenditure grew by 5.3 percent,” PSA said.
Data showed the services and industry sectors grew 7.9 percent and 8.6 percent, respectively in the first quarter while the agriculture sector declined by 4.4 percent, the fourth consecutive quarterly decline since the second quarter of last year.
PSA said on the demand side, growth was investment-driven, with significant contribution from investments in durable equipment.
Household consumption rose 7 percent in the first quarter amid record unemployment rate, while
government consumption increased 9.9 percent. Construction also grew 12 percent, as public construction recovered.
“All these investments give us confidence that the economy will continue to perform well in the succeeding quarters of the year and beyond,” Esguerra said.
Esguerra said election-related spending contributed to the growth in the first quarter and would continue to contribute in the second quarter. He said a 7-percent growth in the second quarter was “very much within the realm of possibility.”
“Overall, the growth prospect of our economy for the next quarters is encouraging. Growth in the second quarter of an election year is usually stronger than in the first quarter. Barring a significant drop in business confidence in the second half, the economy seems to be on track in meeting the full-year target of 6.8 to 7.8 percent,” Esguerra said.
Incoming President Rodrigo Duterte pledged to retain the economic priorities of the outgoing administration of Benigno Aquino, policies that led to the nation’s first investment-grade ratings and its best period of growth since the 1970s.
Duterte “will be handed an economy that is in very good health,” Daniel Martin, a senior Asia economist at Capital Economics Ltd. in Singapore, said in a note to clients. “A sudden shift in policy or a disruption of the political stability that has characterised the last six years could cause sentiment to sour and growth to weaken.” With Bloomberg