Friday, 20 July, 2018

PH economic growth lower than expected at 6.4% in Q1

Reuters Reuters
Theresa Hayes | 19 May, 2017, 06:43

Economic Planning Secretary Ernesto Pernia told Reuters in January he expected annual growth in the first quarter to be between 6.5-7.0 percent, or even higher, as the government committed to ramp up infrastructure spending. But this can be explained by the base effects: "that is, growth a year ago was high due to election spending, as would already know by now, the impact of which was already dissipated", Pernia said.

The Neda chief noted the Philippines remains one of the strongest performers among the major emerging economies in Asia.

The figure, however, was below previous forecasts of economic managers placing it 6.9-7 percent. To see a preview of GDP data, click on The latest growth number matches the 6.4 percent pace in the third quarter of 2015.

This was in stark contrast to Wednesday's session which was buoyed by optimism that first quarter GDP would grow by at least seven percent. Nevertheless, he said, the 6.4% exceeded the growth of neighboring countries, adding that the economy was still on track for the government's 2017 target of 6.5%-7.5% growth.

The agriculture, fishery and forestry sector recovered in the first quarter, growing by 4.9 percent from last year's -4.9 percent.

"The changing of the guards of the government and reorientation of programs really take time to settle, and this slowed government spending for the quarter", Pernia said.

Pernia said he expects public spending to pick up in the succeeding quarters amid the streamlining of government policies. "The 6.1-percent growth in industry also remained respectable with the boost in manufacturing, although tempered by the slowdown in construction and utilities, and decline in mining and quarrying production", he said.

Pernia also pointed out the importance in ensuring that government spending for both consumption and investment remains within the fiscal program, which is critical to sustain the growth momentum.