PH GDP growth slows to 5.5%
THE country’s Gross Domestic Product (GDP) grew year-onyear by 5.5 percent in the second quarter of 2019, the Philippines Statistics Authority (PSA) reported Thursday, Aug. 8, 2019.
Main drivers of growth for the quarter are trade and repair of motor vehicles, motorcycles, personal and household goods; manufacturing; and other services.
Among the major economic sectors, services had the fastest growth with 7.1 percent while industry registered a growth of 3.7 percent. Agriculture, hunting, forestry and fishing had a growth of 0.6 percent.
According to Socioeconomic Planning Secretary Ernesto Pernia the 5.5 percent growth is the country’s lowest growth outturn in 17 quarters, which means that the country will have to grow by an average of at least 6.4 percent in the second half to reach the low-end of the full-year growth target of six to seven percent in 2019.
“As we have anticipated, these have been challenging times. The past year, we had enumerated the major ones that we thought would impact our economic performance, namely the El Nino phenomenon, the increasing protectionism in advanced economies and the election ban on construction activities,” Pernia said.
He said the El Nino phenomenon is seen to be responsible for the contraction in the output of the water-sensitive crops: palay, which contracted by 5.5 percent and corn, declining by 8.4 percent. He also mentioned the growing protectionist stance in the advanced economies which caused a moderate impact on the information technology-business process management sector, so that exports of miscellaneous services only grew by 1.3 percent.
“It used to grow by double digits up until three years ago. Note that the sector is also being adversely affected by the rise of artificial intelligence,” he said.
Pernia also pointed out the ban on public works and other spending, leading up to the May 2019 elections.
“For this reason, government agencies had undertaken pre-procurement processes, short of award, during the latter part of 2018. What we did not foresee though, back then, was the delay in the passage of the 2019 national budget,” he said.
Pernia called for the timely passage of the national budget for fiscal year 2020, so as not to derail next year’s economic growth.
On the external front, Pernia said it is essential for the country to diversify its products and markets through the establishment or improvement of new and existing trade relations with strategic partners.
“This would help the country withstand external shocks and promote growth over the medium term. We should also think beyond traditional export products and markets,” he said.