Phl economy grew 6.8% in 2016, Asia’s fastest
The Philippines eclipsed China as the fastestgrowing economy in Asia with a solid 6.8 percent expansion in 2016, well within the high end of government’s six- to seven-percent target for the year, the country’s chief economic planner said yesterday.
Citing data released by the Philippine Statistics Authority, Socioeconomic Planning Secretary Ernesto Pernia said despite a weaker 6.6 percent gross domestic product (GDP) growth in the fourth quarter, the domestic sector remained robust for the whole 2016, propped up by stronger performance of the industry and services sectors.
Growth last year was faster than the 5.9 percent expansion in 2015, but still short of the 7.2 percent record in 2013.
Pernia said this brings the seven- year moving average of real GDP growth rate to 6.3 percent – the highest since 1978.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., in a statement, said the 6.6 percent GDP growth in Q4 as well as the whole year growth of 6.8 percent were “in line” with market expectations.
“The details show that domestic demand continues to be robust,” he said.
For his part, Finance Secretary Carlos Dominguez said the strong performance of the economy in the second semester of 2016 – when the new administration took over – gives further incentive for the government to pursue reforms, such as improving the ease of doing business and lifting the constitutional and regulatory barriers to foreign direct investments.
He added this gives more reason for the Department of Finance (DOF) to aggressively push for its proposed Comprehensive Tax Reform Program to give the government more opportunities to raise funds for its intensified infrastructure spending program.
Dominguez said the Philippines is well positioned to grow between 6.5 percent to
seven percent this year given the government’s resolve to further strengthen its macroeconomic fundamentals and maintain “solid buffers” to cushion the risks and uncertainties posed by global developments like the US Federal Reserve interest hike and the US protectionist stance.
In a statement, presidential spokesman Ernesto Abella said the solid growth numbers were “a testament that our economy remains robust and is growing at a healthy and steady rate.
“The last quarter of an election year is usually weak with the government transition. However, in our case, it has actually improved. He said in a press briefing yesterday.
Business leaders were likewise impressed with the country’s economic expansion last year, but cautioned on the potential impact of the United States’ new administration and the Philippines’ new foreign policies on this year’s development.
“This is a welcome development. Note that despite infrastructure constraints, adverse impact of weather shocks especially to the agriculture sector and lower growth in the region and the rest of the world, a 6.8 percent growth is impressive,” Makati Business Club (MBC) chairman Ed Chua said.
“Our 6.8 percent 2016 GDP is very robust and impressive. It reflects both the sound economic fundamentals inherited from the previous administration and the business community’s confidence in the Duterte economic team and 10- point economic program,” MBC trustee and former chairman Ramon del Rosario Jr. added.
Management Association of the Philippines’ (MAP) immediate past president Perry Pe said the local economy was not only able to withstand weather disruptions but also the change in the country’s administration and interna- tional events such as the “Brexit” and Donald Trump’s win as the 45th US president .
“This rate of growth is just about right. Remember we had a change in government last year and we also had our weather disruptions. Plus other world side events so this is okay,” Pe said.
ING senior bank economist Joey Cuyegkeng, meanwhile, noted the robust domestic demand in 2016 was driven by resilient structural inflows and low 2016 inflation rate.
He said investment growth has also become significant, which implies that economic growth in the country is increasingly becoming investment driven.
“This implies an expansion of absorptive capacity of the economy leading to a sustained growth of six percent or higher. Public construction would also contribute to overall growth in 2017, but infrastructure spending growth would moderate,” Cuyegkeng said in a statement.