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PH economy ‘grew fastest in Asia’ in Q3 2016

GDP for July–September period at 7.1 percent

Updated

Makati skyline / Manila Bulletin file photo

Makati skyline / Manila Bulletin file photo

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.

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  • Simon

    I am illiterate in economics, but if the PH economy grew, why the Peso value falls against Dollar? Does it means that if the Dollar goes up to P65 exchange rate next year PH will now be the Asian Tiger?

    • Ryanir Mustafa

      I can’t answer you because i am also an illiterate in Economics, my bet is if we as a common/ordinary people start to have a better life then that is a sign, i don’t care if it reaches Php100 to 1US$ as long as the basic commodities we need is affordable within our budgets easy reach.

      • Simon

        I agree but so far tuyo’ , a dried fish commonly eat for meals by poor families like me, price goes up also as high as P3 each even “bagoong” or small shrimps. So how can these TNT Filipino will go back in PH if they can afford to eat simple bacon there?

    • vg

      Here’s how it works. The peso falling in value against the US dollar has no impact on the lower class and the middle class, since they normally do not buy imported items. Ok, maybe the middle class do buy some imported items and maybe they do make an international trip. Then they will be affected for those things only.

      The upper class is impacted when foreign investors see their stock investments drop in terms of US dollars. They begin selling their stock in PH companies and take their money out of the PH. Our upper class sees the stock market drop and their capital invested also drops. The upper class are the losers. Besides the stock market they are the ones buying foreign items and taking international trips.

      The winners in all of this are our OFWs. Every time the peso drops they are being paid more in terms of pesos.

      The economy and the peso value are not tied together like we have seen. When there are more buyers of the US$ in the market the peso will fall. What we have seen is foreign investors exchanging their pesos for dollars and then taking the dollars out of the country.

      • Jorge Wynno

        Good post….mostly. The one thing you left out is that there are 15,000,000 OFWs. They support at least 45,000,000 relatives in the Philippines. Total remittance is $6 billion a year. Every peso increase on the dollar is going into domestic consumption. Hence helps families at home. And thereby helps the economy.

        • Simon

          So this simply means that the PH Government should send more workers abroad in order to help the sinking economy? And for sure the Government already defends to OFW to stay out of the country despite of their loneliness to their families.

          • mac

            the PH government doesnt send workers abroad, they are not force to do so, the reason why people work abroad is because of the lack of opportunity for work here (unqualified), or they are being underpaid.

            the problem with the country is that income is centralized, site for example nowadays pinoy can already earn the same in manila than going to dubai or middle east for service work (except engineering)

            i have a friend who is being offered work in okada here in manila who opted not to go to sg because considering the cost of living, his income already has cost advantage than going there, with a difference of just a quarter less.

            in cebu alone, ITs from that area is earning more than in Luzon,
            i have yet to see Mindanao catching up.

            i just hope that the government can come up with a wealth mgt fund for the OFWs.

      • Simon

        So does it mean that the winner here are the upper class and the OFWs? And what about those lower class who are earning below the minimum or those earning from the garbage? Looks the economy favors only for the rich? Very confusing economic growth in the Philippines.

    • Jorge Wynno

      Weaker the peso, stronger the economy. Check out the Japanese yen vs $. Export increases. Domestic consumption increases bcoz OFWs remittances bring more pesos for the families.

      • underthePhilippineSun

        you are a MOR0N… you are misguided…

        • Jorge Wynno

          My mental state, you presume, has nothing to do with simple economic facts. Google it genius. “Why weak peso is good for Philippine economy?” You must be one of those “proud pinoys” who think that strong currency = strong country and economy. I am not going to call you names though. You ain’t worth my time.

          • underthePhilippineSun

            Just keep on reading and researching…

            And one day, YOUR IDEA of “Weaker the peso, stronger the economy.” WILL CHANGE…

        • Jocel

          you check the case of China, see how they manipulate devaluing Renminbi. Strong currency doesnt necesarily means strong economy.

          • underthePhilippineSun

            i am NOT CHALLENGING your statement “Strong currency doesn’t necessarily means strong economy.”…

            but i DO CHALLENGE the statement “Weaker the peso, stronger the economy. “…

            The two statements are TOTALLY DIFFERENT…

    • Jocel

      it depends, in the context of the Philippine economy the weaker the peso the merrier the exporters, BPO’s and OFW. if we have stronger peso, we are in a better standing to repay our external debts, paying our imports and the like. So the more diversified our economy, the more cushioned we are against external shocks.

    • mac

      a weaker currency, is beneficial for PH since we are export and consumer driven,
      im no economist but as far as I understand a country with BPO, export and remitance as main driver of growth benefit greatly from this.
      it gives ofw beneficieries added disposable income because dollar has more value
      exports are attractive because they are cheaper

      as long as inflation is well controlled it will be positive for the country.
      an exchange rate would only be destructive if it is a sudden surge, say for example from 46 to 48, this would normally wont happen because BSP is their to defend our currency.

      good news is that fuel, oil is not increasing this is very positive for the country.
      weaker currency + slow inflation = positive news

  • PinaBusikat

    Drug trade has no official economic value. The drug trade killings affects mostly the poor. The victims’ of the killings loss of income has a small dent on economic activity. Whether or not the shadow economy of drug money spurs consumption and spending is arguable. Money not spent on drugs is still money that wiggles to fly away from the pocket.

  • underthePhilippineSun

    TOO GOOD TO BE TRUE…

    Keep on MANIPULATING the numbers PSA…. Keep on FOOLING the FILIPINO people….

    And one day, REALITY will SLAP your FACE….

    • Jocel

      lol…i slap mo muna sa face mo ngayon ang 7.1%

      • underthePhilippineSun

        The 7.1% (value is manipulated) they are claiming is SPILL-OVER from the previous administration…

        Remember that budgets are done in FISCAL year and DEFINITELY NOT as per presidential terms…

        i will appreciate if you have SOME IDEAS TO SHARE other than name-calling…

        • R_RR

          You deserved to be insulted because of your ignorance on how GDP is computed.

          • underthePhilippineSun

            wow, what a genius!…. do you think i am insulted then?

          • R_RR

            Try harder.

        • mac

          para sa nagsasabing election spending growth to.

          this 3rd quarter is actually different,
          traditionally 1st and 2nd quarter would result a spike in GDP
          and 3rd will dwindle down.

          2010 election
          arroyo:Q2 8.9%
          aquino: Q3 7.3%
          (Down 1.6%)

          2016
          aquino:Q2 7% election spending
          Duterte: Q3 7.1%
          (up .1%)

        • Jocel

          Manipulated for wha? Punta ka nga ng NEDA I confirn mo teh. Lol

          • underthePhilippineSun

            it is very pragmatic… since du30 holds office in malacanang, psei stocks PLUNGES… philippine stocks are very GOOD INDICATION of healthy economy… domestic economy did not even have dramatic progress lately..

            wait until the middle of next year to see the real score is…

          • Jocel

            correction… it’s just one of the indicators. Check your econ books.

  • Oliver Queen Alyas Ro…

    49pesos ang 1 dollar dammit. 😀

    • Jocel

      kya nga masaya kami mga ofw kasi mas malaki value ng pinapadala namin

      • Oliver Queen Alyas Ro…

        Congrats sir/ma’am. Tiis lang din kami dito sa PH pagbili bili ng US products online. Laki ng conversion then + tax pa pagdating ng credit card bill.

        • Jocel

          Korek, tiis ka muna kasi mahina peso ngyon. Go for philippine product muna.

  • victor arches

    GDP growth 3Q – 7.1%, the highest in the entire Asian region, beating China’s 6.7%. To think that Pareng Digong’s 17 approved infrastructure projects worth P440 Billion have not yet been started.
    I have no doubt whatsoever that in 2017, we should be hitting at least 8%, maybe even 10% factoring in the multiplier effect of government expenditures on consumption and investment.

    • Karpinterong Manunuos

      Ito ang totoong utak-ipis. Kung makasunggab naman ng credit wagas. Esep-esep din. Mr. dutertard, ang statistics na pinag-uusapan dito 3rd Quarter. Kelan ba umupo ang panginoon mo? 3rd quarter din d ba? Ipaliwanag mo nga bakit may kinalaman yang panginoong Digong mo sa performance ng economy sa 3rd quarter? Ikaw din nagsabi hindi pa in place mga economic programs ng panginoon mo. Credit sunggab agad?
      Oo nga pala binabawi ko yong sinabi kong utak-ipis ka. In afraid i might be doing injustice to the lowly ipis the way you revealed yourself sa isyung to. Bwahahaha

    • Karpinterong Manunuos

      Supalpal di ba?

  • Oscar Salomon

    HOORAY!!What can we say as it is a great news which should continue and should really encourage more investments as well as growth of SME’s all over the country and for further progress and development in Mindanao if the government and its counterparts settle all issues and agree to end hostilities and sign the peace agreements.If Mindanao attains the peace that it has been struggling for then it will further increase our GDP. The government and the Mindanaoans stands to gain from spending on its infrastructures such as seaports, airports, railways, roads and bridges as these will increase activities in agriculture, manufacturing, tourism, real state, logistics and others.With the power generation already expanded and have become stable we can expect further development in the manufacturing area. The steel manufacturing plant in Iligan City can now be revived given the availability of the power supply. Stainless steel manufacturing can now be realized out of our nickel resources available in the island. Rubber manufacturing should also be established. All other agricultural products shall have processing plants to add to their value instead of exporting them raw.
    Those who profess violence or are involved in illegal activities should now consider abandoning these or their violent activities so peace can come to their communities so everybody will benefit. Businesses will flourish, livelihood and jobs will be available. There will be no fear, children can go to school, parents can go to work or earn in their livelihood. Entrepreneurs can go about their businesses. And at the end of the day people can celebrate together and be happy!!