Pernia: Philippines economy undergoing reforms

CEBU, Philippines — The Philippine economy is undergoing structural reforms to ensure a broad based growth.

Economic planning chief Ernesto Pernia recently said that sources of the country's economic growth have broadened.

He particularly noted that growth now is driven by investments, citing consumption on the demand side and manufacturing on the supply side.

He said recently reported in an event in Cebu City that the resurgence of the manufacturing sector is especially noteworthy.

In May 2018, he said the volume of production expanded by 20 percent, sustaining its double-digit growth since the start of the year.

He said the resurgence is likely to continue as foreign investors see the country as a potential manufacturing hub.

"This means that the quality of economic growth is improving which implies that it is sustainable and able to generate quality jobs," he said.

In the first quarter of 2018, the Philippine economy grew 6.8 percent, among Asia's fastest growing.

Gross domestic product (GDP) last year posted 6.7 percent growth, one of the fastest-growing economies in Asia, after China’s 6.9 percent and Vietnam’s 6.8 percent.

The monotonic uptrend of the economy is a result of its going structural transformation.

This means that growth is increasingly being driven by investments vis-à-vis consumption on the demand side, and by the industry sector (especially manufacturing) relative to the service sector on the supply side.

In other words, the sources of economic growth have diversified, Pernia said.

Such qualitative change enables the economy to sustain growth and generate more stable and quality jobs, he said.

Further to the preceding slide on sources of growth, this one shows GDP performance across the economy’s various sectors for each quarter in 2017, and full year 2017 vs 2016.

Total factor productivity (TFP) growth of the economy in recent years has been the fastest among ASEAN-6 countries – averaging 3.01 percent over the period 2010-2015, based on computations by the Asian Productivity Organization.