The Q2 growth is an upbeat start for the Duterte administration, Socioeconomic Planning Secretary Ernesto Pernia said. File photo
MANILA, Philippines — The country’s gross domestic product (GDP) expanded by 7 percent during the second quarter of 2016, the Philippine Statistics Authority (PSA) announced Thursday.
The Q2 growth is an upbeat start for the Duterte administration and is within market expectations, according to Socioeconomic Planning Secretary Ernesto Pernia.
Pernia said the Philippines likely remains the fastest or at least second fastest growing economy in the second quarter of 2016 among the major emerging economies in Asia followed by China (6.7 percent), Vietnam (5.6 percent), Indonesia (5.2 percent) and Malaysia (4.0 percent).
GDP is the sum total of all goods and services produced within an economy in a given period.
The growth in Q2 was driven by the services sector which expanded by 8.4 percent compared to the 6.7 percent in the same period last year.
“Among the three major economic sectors, services gave the highest contribution to the GDP growth in Q2 accounting for 4.8 percentage points,” the PSA said.
This was followed by the industry sector which grew by 6.9 percent.
The agriculture sector, however, was a poor performer declining by 2.1 percent. It pulled down the GDP growth with -0.2 percentage point. PSA said agriculture has been on the decline for five quarters already due to disasters, said Rosemarie Edillon, assistant director-general of the National Economic and Development Authority.
“While it is normal to see a slow down in the second semester during election years, possibly by 1.5-2.0 percentage points lower than the first half, the smooth transition of power and assurance of macroeconomic policy consistency and continuity by the new administration will likely keep business and consumer confidence strong to meet the full-year target,” Pernia said.
He said that the challenge, however, is how to make the growth inclusive.
“Despite the good numbers for the first semester of 2016, there is still a risk of seeing lower growth in the second half of the year,” Pernia said, adding that it is a normal occurrence during election years.
Pernia said that the new administration is aiming for a steady acceleration of growth towards 7 to 8 percent beyond this year, which will be supported by comprehensive reforms in tax, sustained investment in infrastructure, easing foreign invest restrictions, reduction of the cost of doing business and strengthening agri-industrial linkages.
