Philippine economy grows 6.4 percent in first quarter
- Author: Zachary Reyes May 18, 2017,
May 18, 2017, 22:18
Government spending for infrastructure slowed down due to lower equity and capital transfers to local government units, Department of Budget and Management (DBM) data showed.
The GDP data was also by far the poorest reading since President Rodrigo R. Duterte emerged victorious in last year's presidential elections.
From 5.2 percent of GDP this year, infrastructure spending is projected to rise to 7 percent by the end of Duterte's six-year term in 2022.
Not to be overlooked, however, is the impact of slower government spending in the first quarter which Pernia attributed to the change in administration and reorientation of programs.
Investments rose 7.9%, moderating from year-ago's 31.5% and past quarter's 14.7%.
Based on the National Economic and Development's presentation, there is a downward trend in terms of gross domestic product (GDP) growth during the post-election period.
Mr. Cahyadi added that investment growth had been averaging almost 20% in the last two years, faster than it had been the ten years prior. The deceleration in construction and real estate might possibly alleviate concerns of a property bubble.
On the production side, the services sector expanded by 6.8%.
"The services sector continued to be the main driver of growth as it grew by 6.8 percent".
A slew of indicators also points to strong economic activity in the first quarter, although the previous year's pre-election spending may take some steam out of 2017 year-on-year figures.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the growth outlook remained strong, even as the first-quarter output was slower than market anticipated.
Agriculture growth accelerated to 4.9%. Mr Cahyadi expects full-year growth to come in at 6.4 percent.
Socioeconomic Planning Secretary Ernesto Pernia said the growth was faster than other countries like Indonesia, Thailand and Vietnam.
"It is, however, lower than expected, and for this we were somewhat downcast because we were expecting something like around the midpoint of growth range 6.5 to 7.5 percent", Pernia said. "It is important to ensure that government spending for both consumption and spending remains within the fiscal program, which is critical to sustain the growth momentum", Pernia said.
"GDP expansion in the year's first three months illustrates that growth remains steady and could gain momentum for the rest of the year, partly as a result of this administration's "Dutertenomics" strategy to stimulate economic activity and achieve financial inclusion for all Filipinos in the long haul via an aggressive expenditure program on infrastructure, human capital formation and social protection", Dominguez said.