Photo by Jire Carreon/Rappler
MANILA, Philippines (3rd UPDATE) – The Philippine economy slowed down to 6% during the 2nd quarter of the year, the Philippine Statistics Authority (PSA) said on Thursday, August 9.
It also fell short of market expectations. Estimates had ranged from 6.6% to as high as 7%.
Socioeconomic Secretary Ernesto Pernia attributed the slowdown to policy decisions which would "promote sustainable and resilient development."
Pernia said the closure of Boracay "partly made a dent on the economy with growth in exports of services slowing to 9.6% in the 2nd quarter from 16.4% in [the] 1st quarter."
"We are also referring to regulations in the mining sector – the closure of several mining pits and the excise tax on non-metallic and metallic minerals – so that mining and quarrying sector showed a lackluster performance. It is down by 10.9%," Pernia said.
"Moreover, the stricter enforcement of regulations on aquaculture producers at Laguna Lake resulted in the drop of freshwater fish catch," he added.
Pernia said the measures will ensure sustainable and long-term growth for the economy. The policy decisions were also "prudent and judicious."
The GDP is used by various agencies and experts to track the country's growth. The figure accounts for all the finished goods and services produced within the country in a specific period. (READ: The Philippine economy's health under Duterte)
Build, Build, Build push
According to the PSA, the growth in the 2nd quarter of the year was mainly driven by manufacturing, trade, and construction.
Pernia called for the "timely implementation of the Build, Build, Build program" as it "bodes well [for] the construction industry and is seen to boost not only public construction but private builders as well."
He is also pushing for the immediate entry of the 3rd telecommunications player to enhance efficiency of communications and in turn support the growth of small businesses, particularly retail trade.
The socioeconomic planning chief also sought the "immediate approval of the 11th Regular Foreign Investment Negative List, or FINL... to reduce foreign investment restrictions."
"Together with the proper implementation of the Ease of Doing Business Act, this will surely encourage more investments from both foreign and domestic sources," Pernia added.
Economic managers are gunning for GDP under President Rodrigo Duterte's term to hit an average of 7% or above.
First Metro Investment Corporation is among the most bullish on the economy and expects the Philippines to hit the target this year.
"[The growth is] not a product of any speculation, but of brisk economic activities related to manufacturing, construction, and retail trade with strong job creation and corporate earning impact," First Metro vice president and head of research Cristina Ulang told Rappler.
Pernia previously said the GDP would have been better if not for "spoiler" inflation.