Philippines one of best performing economies in Asia as GDP grows 6.5% in Q2: Pernia

August 17, 2017

The Philippines remains as one of the best performing economies in Asia after posting an economic growth of 6.5 percent in the second quarter of this year, Socioeconomic Planning Secretary Ernesto Pernia said on Thusday.

In a press conference in Quezon City, Pernia, also director general of the National Economic and Development Authority, said the goverment is "on track" of meeting its full-year growth of 6.5 to 7.5 percent in 2017.

"We have overtaken Vietnam’s 6.2 percent growth and Indonesia’s 5.0 percent growth rate. This puts the country as either the second or third fastest growing major Asian economy, next only to China whose growth rate is 6.9 percent growth in the second quarter," he said.

Malaysia and Thailand were yet to release their data, Pernia said, while noting, "we can expect that they will be lower than the performance of the Philippines for this quarter."

The second quarter growth brought the first semester gross domestic product expansion to 6.4 percent.

Among the major economic sectors, industry recorded the fastest growth at 7.3 percent during the second quarter, National Statistician Lisa Grace Bersales said.

She said services slowed down to 6.1 percent compared with its 8.2 percent growth posted in the same quarter last year.

Agriculture recovered with 6.3 percent growth from 2 percent decline in the previous year, she said.

On the demand side, the Philippine Statistics Authority showed household consumption grew by 5.9 percent in the second quarter, slower than the 7.5 percent growth in the same quarter of 2016.

Government final consumption expenditure also decelerates, hitting only 7.1 percent from April to June this year compared to 13.5 percent a year ago.

"The slowdown was due to the decline in the maintenance and other operating expenditures of various government line agencies and the absence of election-related expenditures during this period," PSA said. National and local elections were held in May 2016.

Investments in construction grew 7.3 percent in the second quarter, lower than the 17.9 percent growth in the previous year. Private construction, which accounted for 6.3 percent of total construction investments, went up by 4.7 percent, but lower compared with the 10.8 percent growth a year ago. Public construction expanded by 12 percent, slower compared with the 33.5 percent growth in 2016.

Meanwhile, Pernia did not see the recent developments, such as the bird flu outbreak, the peso depreciation and the Marawi crisis, to dampen growth in the remainder of the year.

In the case of the avian flu outbreak in Pampanga province, he said there was "nothing really to worry about" as the Department of Health and Department of Agriculture have been addressing the situation.

He said those agencies were making sure that the disease would not spread and would just be contained in the farms where cases of bird flu were confirmed.

As to the weakening of the peso against the US dollar, the NEDA chief echoed the assurance of central bank governor Nestor Espenilla Jr. that there was no reason to be concerned about.

He said that 52 to a greenback is still manageable.  The peso has remained over 51 to a US dollar.

In the case of the rebellion in Marawi, which prompted President Rodrigo Duterte to declare martial law in the whole of Mindanao, Pernia reiterated that the investors feel safer and more confident in investing in Mindanao due to martial law in the region.

He noted that specifically, business in Davao is "brisk."

He added that the planned multi-billion rehabilitation program for the war-torn Marawi would be "stimulus in economic growth in Mindanao."

"Given the performance of the economy in the first half of the year, we only need to grow by 6.5 percent to meet at least the lower bound of our full-year target of 6.5 to 7.5 percent," he said.

"With all of us exerting all efforts, and moving in sync, to improve our economic performance, I can see the country demonstrating a more impressive performance for the rest of the year and even over the medium term," Pernia added.

Malacanang welcomed the country's economic performance for the second quarter of the year.

"Indeed, our growth momentum is on track and that we would sustain our pace for the rest of the year as we continue to lay down the foundation of a comfortable life for all through increased investments in infrastructure and social protection," said Presidential Spokesperson Ernesto Abella in a statement. Celerina Monte/DMS