Philippine GDP growth still below target at 5.5% in Q2 2019
MANILA, Philippines (UPDATED) – The impact of politicians bickering over the 2019 national budget lingers on, as the country's gross domestic product (GDP) settled below target at 5.5% in the 2nd quarter of 2019.
The latest figure, announced on Thursday, August 8, is lower than the 5.6% recorded in the 1st quarter and the lowest in 17 quarters.
It also remains below the government's target of 6% to 7%, and failed to meet analysts' expectations. The year-to-date average now stands at 5.5%.
Among the major economic sectors, services had the fastest growth with 7.1%. Industry registered a growth of 3.7%, while agriculture grew only 0.6%.
Socioeconomic Planning Secretary Ernesto Pernia described the recent quarters as "challenging times." GDP now needs to grow by at least 6.4% in the 2nd half of 2019 to meet the lower end of the target for the year.
Aside from the budget impasse, Pernia attributed the slowdown to the weak El Niño, the global slowdown brought about by the trade war between the United States and China, and the election ban on construction activities.
"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 Niño phenomenon, the increasing protectionism in advanced economies, and the election ban on construction activities," Pernia said.
If not for the budget delay, National Economic and Development Authority Undersecretary Rosemarie Edillon said GDP growth could have been a full percentage point higher.
The GDP is an economic indicator which accounts for all the finished goods and services produced within the country in a specific period. (READ: [ANALYSIS] The poor quality of economic growth under Duterte)
The government's economic managers now need to aggressively spend on programs and infrastructure projects to hit the target in 2019.
Multilateral lenders like the World Bank and the Asian Development Bank already downgraded GDP growth forecasts, but still projects it to cling to the lower end of the target band at 6.2%. – Rappler.com