Philippine economy grew 6% in second quarter

August 9, 2018

The Philippine economy slowed down to 6 percent in the second quarter from a revised 6.6 percent in the first quarter, the Philippine Statistics Authority (PSA) said Thursday.

Socioeconomic Planning Secretary Ernesto Pernia said the lower growth was due to policy decisions "both prudent and judicious" in the long-term like the six-month closure of Boracay, tighter mining and aquaculture regulations.

Pernia said the temporary closure of Boracay Island partly made a dent on the economy with growth in exports of services slowing to 9.6 percent in the second quarter from 16.4 percent in first quarter.

Due to closure of several mining pits and the excise tax on non-metallic and metallic minerals, the  mining and quarrying sector is down by 10.9 percent, he said. Stricter enforcement of regulations on aquaculture producers at Laguna Lake resulted in the drop of freshwater fish catch.

Pernia added that had it not been for inflation would have been within  7-8 percent full year range.

"Although this growth still puts the Philippines as one of the best-performing economies in Asia, just after Vietnam at 6.8 percent growth and China at 6.7 percent growth, and ahead of Indonesia’s 5.3 percent, this growth rate is less than what we had hoped for," said Pernia.

The Bangko Sentral ng Pilipinas is to hold its policy-setting meeting Thursday afternoon to decide if it should raise rates for the third time this year. It had raised policy rates by .25 percentage points twice due to high inflation.

The PSA said manufacturing, trade, and construction were the main drivers of growth for the quarter.

Among the major economic sectors, services recorded the fastest growth at 6.6 percent. industry followed with a growth of 6.3 percent, and agriculture with a growth of 0.2 percent.

"We are also gravely concerned about the almost stagnant output of the agriculture sector and this supports our premise that the main reason behind the high inflation is the gross deficiency in the domestic production of food, which was not augmented by imported goods especially rice," said Pernia.

"Palay, corn, sugarcane and mango harvests for the quarter were dismal. Coconut including copra, livestock and poultry production all reported weak output," he added.

With the country’s projected population reaching 106.2 million in the second quarter of 2018, per capita GDP grew by 4.3 percent. DMS