ASEAN KEY DESTINATIONS
GDP nearing 7% in Q2
PHILIPPINES: The National Economic and Development Authority (NEDA) is upbeat that the country’s economy would grow at a much faster pace in the second-quarter of the year as exports and the agriculture sectors have started to improve.
Socioeconomic Planning Secretary Ernesto M. Pernia said the economic expansion, as measured by the country’s Gross Domestic Product (GDP), may “approach 7.0 percent” in April to June this year, stronger than the 6.4 percent registered in the first-quarter.
“I think it would pick up… Second-quarter will be higher than the first-quarter. If you look at leading indicators, the exports [and] agriculture are improving. I think it will approach seven percent [but not exactly seven percent] — it’s better to be conservative,” Pernia told reporters.
The recovery of the global economy is also providing a boost to the country’s economic growth, the NEDA chief said.
Pernia also noted that the unrest in Mindanao, particularly in the city of Marawi, would not affect the overall economic performance, saying it is “a small fraction of the country in terms of population and economy.”
He also shrugged off the potential impact of the unrest on the country’s growing tourism sector along with the recent attack at the Resorts World Manila.
“These are very short-lived, ephemeral, passing incidents. It’s not something that’s really going to have an impact. Again, those are temporary jitters, it will soon dissipate. We have to be upbeat,” Pernia said.
Last Friday, the Development Budget Coordination Committee (DBCC) kept its GDP target at 6.5 percent to 7.5 percent this year, and 7.0 percent to 8.0 percent starting next year until 2022.
The inter-agency body said the country is expected to sustain its growth as macroeconomic fundamentals, including imports remain stable, while exports are expected to improve.
Further, the DBCC said the expansionary fiscal policy of the government is expected to boost the performance of the Philippine economy.
“Expected drivers of economic growth include construction and infrastructure development, primarily fueled by the administration’s ‘Build, Build, Build’ program,” the DBCC said.
“Also, the increase in government spending is seen to propel the economy upwards as the government plans to expand its investment in human capital,” it added.
In the first three-months of the year, the Philippine economy grew at its slowest pace in more than a year at 6.4 percent on weaker government spending.
Despite the slowdown, the Philippines remained one of the fastest growing economies in Asia with robust consumption, which fueled last year’s growth, continuing to bolster economic activity as exports pick up.
“Moving forward, the domestic economy is poised to maintain its growth momentum with the recovery of external trade and the private sector’s steadfast optimism,” Pernia said, adding growth was broadly in line with the 6.5 percent to 7.5 percent target for this year.
Pernia said the slowdown could be explained by the absence of election spending, which boosted growth a year earlier.
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