THE government and private economists, as well as international institutions, are all optimistic about the bright prospects for the Philippine economy for 2017, based on its performance in the first half of the year.
Gross domestic product, or the total output of goods and services, grew by 6.4 percent in the first quarter and improved to 6.5 percent in the second quarter, for an average GDP growth of 6.4 percent in the first semester.
All three major economic sectors contributed to GDP growth in the second quarter: industry grew by 7.3 percent, services by 6.1 percent and agriculture by 6.3 percent, a rebound from its 2.0-percent decline in the same period last year.
Among the major economic sectors, Industry recorded the fastest growth at 7.3 percent. Services slowed down to 6.1 percent against its 8.2-percent growth posted in the same quarter of the previous year. Meanwhile, Agriculture recovered with 6.3-percent growth from 2.0- percent decline in the previous year.
Note that this growth rate, which was the fastest in Asia after China, was achieved without the benefit of election spending, which was partly behind the 6.8-percent growth in 2016.
Based on the economy’s quarterly performance, the benefits from election spending waned in the fourth quarter of 2016, which grew by only 6.6 percent, compared to 7.0 percent and 7.1 percent, respectively, in the second and third quarters, preventing the economy from breaching the 7.0-percent mark.
With no extraordinary boost from noneconomic factors, the economy is showing stable and robust growth. The second-quarter performance marked the eighth consecutive quarterly growth of higher than 6.0 percent.
Both the World Bank and the International Monetary Fund (IMF) expect the Philippines to continue its robust growth this year. The World Bank is projecting GDP growth at 6.8 percent for 2017.
Following its latest review of the economy, the IMF Mission to the Philippines said it was “very optimistic” about the country’s growth prospects. Its latest forecast placed GDP growth for 2017 at 6.6 percent.
The IMF also notes that the economic performance of the Philippines continues to be very strong, featuring robust growth combined with low inflation.
The latest growth reading for GDP—the value of all finished goods and services produced in the country—marked the eighth consecutive quarter that the pace exceeded 6.0 percent.
Socioeconomic Planning Secretary Ernesto M. Pernia estimates that, based on the results for the first half of the year, the economy needs only to grow by 6.5 percent in the second half to reach the lower end of the government’s target range of 6.5-percent to 7.5-percent growth for 2017.
Government spending on infrastructure, which had been blamed for the economy’s slow growth in the previous administration, particularly during its first year, has already become a major growth driver under the Duterte administration.
During the second quarter of 2017, government spending expanded by 7.1 percent, a significant increase from 0.1 percent in the first quarter. According to Pernia, this shows a marked improvement in the absorptive capacity of government agencies.
I join the consensus for a continuing strong performance of the economy. Unlike in the past, when the economy accelerates in a quarter and then slows down in the next, the official GDP numbers are showing stable growth.
We’re also seeing the government ramping up infrastructure spending under its “Build, Build, Build” program. Together with private sector-initiated projects, infrastructure will continue to expand its role as growth driver, as well as job generator this year.
This is what we need: stable growth, manageable inflation and job-generating activities to boost the economy and increase employment at the same time, in order to achieve the ultimate goal—a better life for Filipinos.
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