The country’s gross domestic product expanded 6.8 percent year-on-year in the first quarter, making it one of the fastest expanding economies in Asia, on the back of higher government spending, data from the Philippine Statistics Authority show.
“We are pleased to announce that economic expansion for the first quarter of 2018 hit 6.8 percent, making the Philippines one of the fastest-growing economies in the fastest-growing region in the world,” said Budget Secretary Benjamin Diokno.
“Increased government spending has translated into a strong showing for the Philippine economy in Q1,” he said.
Data showed the first-quarter growth was driven by robust performance of the manufacturing, trade and services sectors. It was faster than the 6.6-percent growth in the fourth quarter of 2017 and 6.5-percent expansion in the first quarter of 2017.
Among the major economic sectors, industry recorded the fastest growth at 7.9 percent, followed by services at 7 percent. Agriculture grew at a slower pace of 1.5 percent.
“This is the tenth consecutive quarter that the economy was able to achieve an output expansion of 6.5 percent or better,” Economic Planning Secretary and National Economic and Development Authority director-general Ernesto Pernia said in a statement.
Pernia said the growth was at par with market expectations and close to the low-end of the government’s full-year growth target of 7 percent to 8 percent for 2018.
Pernia said the economy could have expanded faster, if inflation was more subdued for the period. Inflation in the first quarter averaged 3.8 percent based on the 2012 price index, near the upper limit of the target range of 2 percent to 4 percent for the year.
“If not for the first quarter 2017 to the first quarter 2018 rate of increase in inflation, real GDP growth would have been well within our growth rate targets of 7.0 to 8.0 percent,” Pernia said.
“So, inflation is the spoiler, that is why we really need to focus on inflation especially because it is the number one concern expressed by Filipinos in surveys, by SWS or Pulse Asia,” Pernia said.
The first-quarter performance made the Philippines one of the best performing economies in the region, next only to Vietnam’s 7.4 percent growth, same as China and higher than Indonesia’s 5.1 percent.
Finance Secretary Carlos Dominguez III said the country was on its way to achieving its targets for high growth and financial inclusion for the rest of the Duterte presidency as the government enjoyed enough fiscal space to further accelerate spending on core programs―infrastructure and human capital development. Julito G. Rada
Dominguez said an even more aggressive spending under the ‘Build, Build, Build’ program and other poverty-reduction initiatives would enable the Duterte administration to hit its target of a GDP expansion of 7 percent or better and reduce poverty incidence to 14 percent over the medium term.
“President Duterte’s commitment to attaining an investment-led and inclusive economy via a massive public spending strategy would usher in what the Asian Development Bank has forecast to be the ‘golden age’ of the Philippines’ economic growth,” Dominguez said.
Dominguez said the government’s unprecedented investments in physical and human infrastructure would supercharge the economy; attract more investments, create a lot more jobs, especially for the workforce; and liberate millions of Filipinos from poverty.
The ‘Build, Build, Build’ program is now in full swing, with 75 big-ticket infrastructure projects worth $170 billion and designed to reverse regional underdevelopment and income inequality by creating growth corridors all over the country.