By MB Online
The Philippine economy grew 7.1 percent in the third quarter of 2016, the fastest among Asia’s emerging economies, the National Economic and Development Authority (NEDA) said Thursday, November 17.
The growth was buoyed by investments, improved agricultural output and domestic consumption reflected by strong household spending.
It was higher by a percentage point than the growth in gross domestic product (GDP) recorded in the second quarter—at 7 percent—and the 6.2 percent posted last year.
The third quarter GDP growth “cements our chance of achieving our target of 6 to 7 percent for the whole of 2016,” economic planning undersecretary Rosemarie Edillon said in a statement, adding that it is “above the median market expectation of 6.8 percent.”
Edillon, in her statement delivered by NEDA national policy and planning staff director Reynaldo Cancio in a press briefing in Pasay City, also said the 7.1-percent growth was the best in the region based on already released data, even outperforming Asia’s largest economy, China:
- Philippines = 7.1%
- China = 6.7%
- Vietnam = 6.4%
- Indonesia = 5.0%
- Malaysia = 4.3%
A caveat though: India, which is among the fastest rising Asian economies, has yet to release its economic data.
Factors for growth
Sustainability in public and private sector investments was among the factors in the third-quarter growth, NEDA said.
Infrastructure and construction investments from the private sector grew by 16.2 percent, much higher than the 4.0 percent recorded in the same quarter last year, with investment by the government expanding by over 20 percent.
Private household consumption also grew by 7.3 percent as consumer confidence improved on the back of low inflation, low interest rates, better labor market conditions, slower but steady growth in remittances and help from the government’s conditional cash transfer program.
Exports also rose to 7.8 percent, while agriculture broke its five-quarter decline by posting a 2.9 percent growth as it recovered from the drought caused by the El Niño phenomenon that dissipated on the third quarter.
Industries saw 8.6 percent growth But services and public administration grew slowly to 6.9 percent and 3.7 percent, respectively.
Expectations and risks
The government expects to paint a rosier economic picture for the fourth quarter, fueled by low inflation environment, services sector, strong fiscal spending, domestic demand and growth in agriculture and fisheries.
But the government cautions about the threat of La Niña phenomenon to agriculture and fisheries.
It also keeps a close watch on sustaining the growth in exports amid the sluggish recovery in Europe and the uncertainties brought about by Brexit and the Trump presidency.
It is also concerned about the effect of the ongoing “Saudization” policy or the replacement of foreign workers with Saudi nationals, as well as the outcome of the government’s peace talks with rebel groups.