EDITORIAL - Weaker growth

The Philippine economy has reportedly expanded to 6.2 percent last year, the slowest Gross Domestic Product growth in three years. Government economists pointed to weak exports and slow manufacturing and farm output as the culprit for the growth slowdown.

Now, there are concerns whether the economy would beat this year’s growth target. Many economists said it will be hard for the economy to recover and attain the 2019 growth target of seven to eight percent.

Economic analyst Fitch Solutions expects GDP growth in the Philippines to slow to 6.1 percent this year. It said the strong investment drive will not be enough to turn the table around. “We reiterate our view that the Philippine economy will struggle to reverse its weakening growth momentum over the coming quarters owing to tighter monetary conditions, the potential for a re-escalation of global trade tensions, as well as a deteriorating business environment,” Fitch Solutions said.

As the country’s GDP growth this year settled below the government's target of 6.5-6.9 percent, the good news is that the Philippines is still the fastest growing economy in Asia following India, Vietnam, and China.

The economic growth was really expected to dip. With rising inflation stemming from the implementation of the Tax Reform for Acceleration and Inclusion or the TRAIN law, Filipinos’ purchasing power had taken a huge blow from the rising commodity prices.

With the inflation beginning to ease after peaking at 6.7 percent in the third quarter last year and country holding the mid-term elections in May, economists expect consumer spending to fuel the economy upward.

However, the government should not just rely heavily on public spending to drum up the economy. It should explore more options like putting in place measures that entice more foreign investments.

Massive spending for infrastructure development, which the Duterte administration is now embarking on, is also good for the economy since it will trigger investment opportunities. Of course, it will help revolutionize the tourism industry as well.

There is really a need for the government to put the GDP back on the right track. Since it has only three more years left, the Duterte administration has to show the world that it is serious in prioritizing the economy.