Philippines economy grows 6.2%in 2018

CEBU, Philippines — The Philippine economy grew 6.2 percent in 2018, its weakest in three years, coming from a year of economic shocks -- the inflation crisis and currency fall -- but growth momentum was still seen steady.

The government reported yesterday that gross domestic product (GDP) rose 6.1 percent last quarter, from 6 percent in the previous three months.

The government missed its growth target of 6.5-6.9 percent last year.

The GDP growth in 2018 was also lower than the 6.7 percent posted in 2017.

For 2019, the government targets the economy to expand by 7-8 percent.

While economic expansion apparently slowed down, the Philippines is still among the fastest growing in Asia, joining China and Vietnam.

In a statement yesterday, economic planning chief Ernesto Pernia said Philippines' growth track remains steady.

"This is a firm finish that cements the Philippines' standing as one of the fastest growing economies in Asia," the country’s chief economist said.

Optimism has risen that the easing inflation, which surpassed the central bank’s target last year, and the robust domestic demand will support growth this year.

Last month, inflation slowed to 5.1 percent after hitting its peak in the previous months.

In 2018, the Bangko Sentral ng Pilipinas raised interest rates 175 basis points last, among the most aggressive in Asia, to fight soaring prices and support the currency.

Drivers

Last year, industry grew 6.9 percent, where construction is a major driver, an indication of the government’s infrastructure buildup program.

However, Pernia cited the slowdown in the manufacturing sector to 3.2 percent in the fourth quarter from 7.9 percent in the same period in 2017 as a "cause for concern" amid "weak business confidence and policy uncertainties."

The agriculture sector's growth also remained lackluster, growing only 1.8 percent in the last quarter of 2018.

This was slower than the 2.3 percent growth in the same quarter in 2017 but rebounding from the previous quarter's 0.8-percent contraction.