PH economy grows at its fastest in nearly 2 years

Epifanio delos Santos Avenue (EDSA), the busiest thoroughfare in Metro Manila, Philippines.

THE Philippine economy grew at its fastest in nearly two years, on the back of the government’s catch-up in spending to make up for the delayed approval of the 2019 national budget.

Socioeconomic Planning Secretary Ernesto Pernia told a news briefing on Thursday that the Philippine economy grew to 6.2 percent during the third quarter of the year from the 6.0 percent registered in the same period last year.

“This brings the year-to-date economic growth to 5.8 percent, just slightly below the lower end of the 6-7 percent full-year 2019 growth target of the government,” he said.

“Compared with other major emerging market economies in the region that have already released their third-quarter GDP (gross domestic product) numbers, the Philippines likely ranked second behind Vietnam’s 7.3 percent but higher than China’s 6 percent, India’s expected third-quarter growth of below 6 percent, and Indonesia’s 5 percent for the period,” he noted.

The third-quarter GDP was the fastest since recording 6.8 percent in the first quarter of last year.

The Philippine Statistics Authority attributed growth to main drivers such as trade and repair of motor vehicles, motorcycles, personal and household goods, construction, and financial intermediation.

Among the major economic sectors, Services posted the fastest growth with 6.9 percent. Industry grew by 5.6 percent. Agriculture, Hunting, Forestry and Fishing registered a growth of 3.1 percent.

On the expenditure side, National Statistician Claire Dennis Mapa said that public spending reflected by government final consumption expenditure rose 9.6 percent year-on-year in the third quarter.

Meanwhile, Pernia said that big-ticket infrastructure projects of the Departments of Public Works and Highways (DPWH) and of Transportation (DOTr) mostly contributed to the higher government spending.

To achieve the government’s full-year growth, Pernia said that the economy needed to grow by at least 6.7 percent in the fourth quarter, adding that it is “a challenge that we are confidently taking on.”

“To withstand external shocks and promote growth over the medium term, our country must diversify products and markets through the establishment or improvement of new and existing trade relations with strategic partners,” he added.

In a statement, Department of Finance Secretary Carlos Dominguez III said: “This sharp increase in state spending, particularly on infrastructure development, showed that the Duterte administration has managed to break through the spillover effects of the delayed passage of the 2019 [budget] plus the ban on infrastructure works during the summer elections, both of which induced a lag in economic growth in this year’s first semester.”