PH economy rebounds
6.2% third quarter growth second highest in Asia
THE Philippines continues to be a bright spot in Asia as the country’s economic growth accelerated to 6.2 percent in the third quarter of the year after two quarters of deceleration, according to the government.
Socioeconomic Planning Secretary Ernesto Pernia said the Philippines likely ranked second behind Vietnam’s 7.3 percent but higher than China’s 6 percent during the period.
The 6.2-percent growth from a four-year low of 5.5 percent in the second quarter was attributed to higher public spending and continued growth in services sector, the Philippine Statistics Authority said on Wednesday.
National Statistician Claire Dennis Mapa said economic growth during the quarter also went up from the 6.0 percent recorded in the same quarter last year.
Mapa said net primary income (NPI) from the rest of the world and gross national income (GNI) grew by 2.9 percent and 5.6 percent respectively.
“We are glad to share that after two quarters of deceleration, the growth of the Philippine economy surged to 6.2 percent in the third quarter of 2019,” Pernia said.
Among the major economic industries, services recorded the fastest growth at 6.9 percent mainly due to the acceleration in trade, financial intermediation, and transport, storage and communication.
Industry also expanded by 5.6 percent mostly driven by the growth in construction while agriculture, hunting, forestry, and fishing also posted a 3.1 percent growth.
Government spending grew by 9.6 percent while household consumption also went up by 5.9 percent. Capital formation however contracted by 2.1 percent.
“The stronger growth in public spending in the third quarter contributed significantly to our Q3 (third quarter) performance. Some may be quick to say that the private sector is a timid participant in our economic growth. Nothing can be farther from the truth. We know that the private sector is the main driver of the economy, with the government providing an enabling policy environment and infrastructure. That is why we need to address infrastructure, logistics and regulatory bottlenecks,” Pernia said.
The National Economic and Development Authority chief said the government was committed to speed up the implementation of its programs and projects that were affected by the budget impasse and the election ban earlier this year.
Pernia said the Philippine economy would have to expand by at least 6.7 percent in the last quarter of the year to meet the low-end of the government’s 6.0 to 7.0 percent full-year target.
“[ It] is very achievable. We have seen the economy surging and the momentum will continue. Surging for another five percentage points should be easy,” he told reporters.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno agreed.
“The 6 percent full year GDP (gross domestic product) growth target is a tall order, after a slower than expected first half, but still doable,” Diokno said in a statement.
Meanwhile, the Finance department said Secretary Carlos Dominguez 3rd “remains optimistic that full-year economic expansion could hit the lower band of the official growth forecast of 6 to 7 percent.”
Dominguez attributed the third quarter growth to “government’s bold catch-up spending plan and stronger domestic consumption driven by cooling inflation.”
“The government has managed to hit its spending targets in the latter part of the July-September period, canceling out the residual effects of the nearly five-month delay in the 2019 GAA (General Appropriations Act) that spilled over into the second quarter, and keeping the Philippines among the world’s fastest economies amid the current global economic slump,” he said.
Dominguez projected better growth momentum in the last quarter.
He also expects a further surge in state spending this quarter and in the year ahead in light of the likely early passage of the 2020 national budget and the impending passage of a joint congressional measure extending by a year the validity of the 2019 budget.
The Cabinet official gave assurances that the government will work on keeping the growth momentum by pursuing its three-fold growth strategy — sustained focus on macroeconomic strength via fiscal discipline and stable monetary policy, accelerated spending on infrastructure and human capital development, and further game-changing initiatives such as the remaining packages of the Comprehensive Tax Reform Program to sharpen the country’s competitiveness, attract investments and ensure recurrent revenues to fund the government’s priority programs on inclusive growth.
With these in place, Diokno believes that the Philippines’ growth performance this year “is one of the fastest among relatively large economies, amidst a slowing global economy.”