Philippine economy up 6.5% in Q2

CEBU, Philippines - The Philippine economy rose 6.5 percent in the second quarter of 2017, the government reported yesterday, remaining as one of the best-performing economies in Asia.

The gross domestic product (GDP) growth from April to June was slower than the 7.1 percent in the same period last year but faster than the 6.4 percent in first quarter this year.

"We are well on track to meeting our full-year target growth of 6.5 to 7.5 percent," Socioeconomic Planning Secretary Ernesto Pernia said in a statement yesterday.

The Philippines has overtaken Vietnam’s 6.2 percent and Indonesia’s 5 percent growth.

"This puts the country as either the second or third fastest growing major Asian economy, next only to China whose growth rate is 6.9 percent growth in the second quarter. Malaysia and Thailand have not yet released their data, but we can expect that they will be lower than the performance of the Philippines for this quarter," the economic manager said.

Unlike in the first quarter, Pernia said government spending last quarter picked up but private sector slackened.

Household consumption grew 5.9 percent, supported by record-high consumer confidence, modest inflation rates, and improving labor market conditions.

Government consumption rose 7.1 percent from a meager 0.1 percent in the first quarter of 2017.

The government is moving towards reforming the tax system to make it simpler, fairer, more equitable, and also more internationally competitive.

"Together with other measures, like the lifting of the quantitative restrictions on rice, we expect to increase the purchasing power of the majority of Filipinos, particularly those coming from the lower income groups.  We hope that the business sector would respond by coming up with innovative processes so that goods and services are produced with good quality but affordable prices," said Pernia, director general of the National Economic and Development Authority.

The industry sector grew 7.3 percent, supported by growth of the manufacturing, and mining and quarrying sectors.

Importantly, the agriculture sector continued to recover from El Niño, expanding by 6.3 percent. Meanwhile, the services sector continued to be the main driver of growth despite the 6.1-percent slower growth relative to last year’s 8.2 percent and the previous quarter’s 6.7 percent.

The Philippine Development Plan (PDP) 2017-2022 has outlined the priority strategies for agriculture, industry and services sectors.

"These strategies will be backed by a comprehensive public investment program, but then again, we need the support of the business sector and civil society to make these work," the official said.

In the agriculture sector, Pernia said the goal is to increase the income of farmers and fisherfolk.  The priority strategies are diversification into high-value crops and greater value-adding activities.

"We are hoping that the private sector can reach out to other farmers’ groups and associations, and introduce new technologies on further improving their productivity and adding value to their raw produce," he noted.

The economic chief added: "In the industry and services sectors, we have outlined strategies for greater backward linkage with domestic firms and forward linkages with global firms."

He said medium and large enterprises should take the initiative to link up with the micro and small enterprises.

He urged the private sector to support the call for greater dispersion of economic activity spatially, meaning across the regions, especially the lagging regions.

"We need the private sector to undertake the necessary economic activity to increase the utilization of these public investments and get involved in them.  The private sector can also help us monitor the progress of implementation of these investments (infrastructure projects), knowing that the timely completion of these projects work in both our favors."

"We also need the business sector to conduct transactions with government, ALWAYS, above board.  Even as we continue to ease the cost of doing business, there will still be rules and regulations in place but they will be streamlined and made more transparent and simpler," Pernia further said.

Given the country’s economic performance in the first half of the year, it only needs to grow by 6.5 percent to meet at least the lower end of the full-year target of 6.5-7.5 percent.

Pernia was confident the country is likely to show "a more impressive performance for the rest of the year and even over the medium term." (FREEMAN)