MANILA, Philippines – The Philippine economy grew by 7.1% in the 3rd quarter of 2016, the Philippine Statistics Authority (PSA) announced on Thursday, November 17.
"The Philippine economy has hit its stride in the 3rd quarter, growing strongly by 7.1%. This cements our chance of achieving our target of 6% to 7% for the whole of 2016," Director Reynaldo Cancio of the National Economic and Development Authority (NEDA) National Policy and Planning Staff said at a news briefing.
The figure, which covers the first full quarter of the Duterte administration, is higher than the gross domestic product (GDP) growth of 7% in the 2nd quarter, and is an improvement on the 6% GDP growth recorded in the same period last year.
The latest figure has made the Philippines "the fastest-growing among major Asian emerging economies that have already released data for the quarter," Cancio said.
"We are higher than China's 6.7%, Vietnam's 6.4%, Indonesia's 5%, and Malaysia's 4.3%. India has not yet released their data," he added.
The Philippines was the fastest-growing major Asian economy in the first half of this year, with economic growth even outpacing Asian giant China.
The latest figure exceeded analysts' expectations but is within the range anticipated by the government. Two weeks before the release of the data, Socioeconomic Planning Secretary Ernesto Pernia said that the 3rd quarter GDP likely grew between 6.3% and 7.3%.
The government is aiming for a full-year growth of 6% to 7%.
Cancio said the country has to hit at least 3.4% to attain the low end of the full-year target, and 6.9% to meet the higher end of the target in the next quarter.
Sustainable investments, 4Ps
Cancio said that from the demand side, investments continued to drive the economic growth, "indicating its sustainability."
"Private sector investments in construction grew significantly by 16.2% this quarter from last year's 4%. Public investment in infrastructure remained strong, with public construction expanding by over 20% for the third quarter," he said.
Cancio said private consumption grew by 7.3% over last year's 6.1%, supported by low inflation and interest rates, "better labor market conditions and the steady, though slower growth" in personal remittance of overseas Filipinos.
He also cited the Pantawid Pamilyang Pilipino Program (4Ps) which "provided additional boost to consumer demand."
External demand also improved, with growth in exports of goods growing by 7.8%, Cancio said.
The NEDA official also cited some "recovery signs of agriculture" which grew by 2.9% in the 3rd quarter after 5 straight quarters of decline due the prolonged drought brought by the El Niño phenomenon.
Industry growth improved to 8.6%, but services growth slid 6.9% from last quarter and a year ago, Cancio said.
"Services saw slower, though still reasonable, growth. Expansion in the retail trade, repair of motor vehicle, wholesale and retail and communications subsectors grew strongly. The slowdown in the communications subsector, however, could be temporary as the two large telcos went into a buyout deal with San Miguel Corporation over its control of specific frequencies," the NEDA official said.
He also said public administration slowed to 3.7% compared to previous quarters due to the "waning effects" of election-related spending, which peaked earlier this year.
Cancio said the country's strong economic growth in the 3rd quarter "is a very good sign of things to come" but the government remains "on guard for possible downside risks to the economy."
"Agriculture and fishery remains vulnerable to the possible occurrence of La Niña. Second, despite the uptick in exports, the outlook is clouded by sluggish recovery in Europe and uncertainties in economic policies in the UK and US. Third, the resurgence of the 'Saudization' policy – or the replacement of foreign workers with Saudi nationals – is perceived as an emerging concern," he said.
Cancio added that peace talks between the government and rebel groups should be complemented by efforts to bring sustainable peace and development to the countryside. – Rappler.com