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Philippines third quarter growth fastest in Asia
The Philippines ’ gross domestic product drew 7.1 percent in third quarter, making it the fastest growing economy in Asia , an official of the National Economic and Development Authority (NEDA) said Thursday.
In her statement read by Reynaldo Cancio, NEDA director for policy planning, Rosemarie Edillon, NEDA deputy director general, said “this cements our chance of achieving our target of 6.0 to 7.0 percent for the whole of 2016.”.
“This growth is above the median market expectation of 6.8 percent,” she added.
Edillon said Philippines ’ growth is higher than China ’s 6.7 percent, Vietnam ’s 6.4 percent, Indonesia ’s 5 percent, and Malaysia ’s 4.3 percent. India has not yet released their data.
She said the Philippines needs to grow at least 3.4 percent in the fourth quarter to reach the low-end target of six percent.
“To reach the high-end target of seven percent, we need to grow by 6.9 percent in the fourth quarter,” Edillon added.
The Philippine Statistics Authority said growth was driven by manufacturing, trade and real estate, renting and other business activities.
It said the 7.1 percent GDP growth is higher than the 7 percent in the second quarter and 6.2 percent in the third quarter of 2015.
Edillon said from the demand side, growth in investments for durable equipment remained strong.
“Private sector investments in construction grew significantly by 16.2 percent this quarter from last year’s 4.0 percent. Public investment in infrastructure remained strong, with public construction expanding by over 20 percent for the third quarter,” she said.
“Household consumption also remains a pillar of strength for the domestic economy. With upbeat consumer confidence and as households prioritized enrolment expenses, private consumption grew by 7.3 percent, higher than last year’s 6.1 percent, she added.
Edillon said the “higher private consumption is also supported by low inflation, low interest rates, better labor market conditions and the steady, though slower growth in overseas Filipinos’ personal remittance.”
She said the Pantawid Pamilyang Pilipino Program, or 4Ps, gave additional boost to consumer demand.
“External demand likewise improved, with growth in exports of goods steadily rising to 7.8 percent,” she noted.
On the supply and production side, Edillon noted the recovery signs of agriculture, which is one of the major development priorities of the Duterte administration.
“With the normalization of weather conditions, agriculture grew by 2.9 percent, breaking five consecutive quarters of decline. It has recovered from the prolonged drought brought by the El Nino phenomenon, which already dissipated in the third quarter of 2016,” she said.
Edillon said the industry improved to 8.6 percent while growth in services eased to 6.9 percent from last quarter and a year ago.
Edillon said the strong growth “is a very good sign of things to come” but she also noted that the government “are still on guard for possible downside risks to the economy”.
“Agriculture and fishery remains vulnerable to the possible occurrence of La Niña. Second, despite the uptick in exports, the outlook is clouded by sluggish recovery in Europe and uncertainties in economic policies in the UK and US,” she said.
“Third, the resurgence of the “Saudization” policy ? or the replacement of foreign workers with Saudi nationals ? is perceived as an emerging concern. Fourth, while peace talks between the government and various rebel groups are ongoing, there is a need to consolidate efforts that will pave the way for lasting peace and development in the countryside,” she added. Robina Asido/DMS
