Economist: Industry growth to help boost Phl economy

CEBU, Philippines - The Philippines should focus on stimulating industry as a sector of the economy to boost growth this year, Cebuano economist Fernando Fajardo said.

"One is that industry, which had been the lead sector in the last five years before 2015 should be pushed higher again this year, particularly mining and manufacturing," said Fajardo when asked how the country can accelerate growth this year after its economy grew by 5.8 percent last year, deemed slower compared to 2014.

 Fajardo noted that industry experienced declining growth rate last year to six percent from 7.9 percent in 2014 due mainly to the decline in growth rates in mining and manufacturing.

 He said that mining contracted by 1.3 percent from 4.9 percent while manufacturing grew 5.7 percent from 8.3 percent.

 According to Outgoing Economic Planning Secretary Arsenio Balisacan, in his statement on the latest 2015 economic growth data, the industry sector is much affected by external demand, which has been weak in all of the past six years.

 He pointed out that innovation and diversification are critical strategies needed by industry as well as by agriculture, whose contraction in the last quarter in 2015 also weighed on the economy.

 "From the production side, the culprit was agriculture which grew only by 0.2 percent in 2015 compared to 1.6 percent in 2014," said Fajardo, who teaches economics at the University of San Carlos.

 Fajardo also blamed slower growth to the large gap in growth in the country's imports (11.9 percent) and exports (5.5 percent) last year.

 "A faster increase in imports over exports reduces our net exports. In 2014 our net exports was negative P70 billion. Last year it went up to negative P294 billion," the economist noted.

 Net exports is the value of a country's total exports minus the value of its total imports.

 In November last year, the Philippines registered a trade deficit of $976.87 million, which means the country's imports exceeded its exports.

 Exports continued to fall last year due mainly to the weak global demand. (FREEMAN)