In another coup for the country, the Philippine economy grew 6.9 percent in the first quarter of 2016, posting the best performance among 12 countries in the region, including China.
The Philippines outpaced the Asean-5 and, for the first time in 27 years, China, as well, despite a weakening in global growth. China trails us at 6.7 percent, followed by Vietnam at 5.5 percent, Indonesia at 4.9 percent and Malaysia at 4.2 percent.
This quarterly growth rate of 6.9 percent is the highest in three years, and figures among 69 straight quarters of growth and 17 consecutive quarters of growth above five percent.
According to the National Economic and Development Authority (Neda), the country’s GDP growth was driven in part by government spending, which grew 9.9 percent, way beyond the 0.2 percent in Q1-2015. Public construction at 40 percent accounted for much of the growth in the first quarter.
In peso terms, public expenditures amounted to P591.5 billion in the first quarter, a growth of 17 percent, attributable to the comprehensive release of the budget at the start of the year, allowing government agencies to begin carrying out projects and programs, particularly infrastructure projects and health- and education-related capital outlays.
According to the Department of Finance (DOF), also contributing to the growth is capital formation at 23.7 percent, the highest in 10 quarters, with fixed capital formation weighing in at 25.5 percent, the highest in 23 quarters, or an equivalent of 5.8 percentage points of real GDP growth. This points to investor confidence in the country’s continued economic acceleration and promise for
future growth.
Household consumption showed a seven percent increase due to low and stable prices and record low unemployment of 5.8 percent as of January, the lowest in 10 years. Certain industries also performed well: commercial-vehicle sales increased 23.4 percent this first quarter; travel growth at 7.8 percent was ascribed to the 15.1-percent increase in tourist arrival figures; and information-technology and business process outsourcing related services grew 12 percent.
The DoF gave assurance of sound macroeconomic fundamentals: the country’s current account surplus is “estimated at $8.9 billion or at least three percent of GDP.” Meanwhile, a “record debt-to-GDP ratio of 44.8 percent in 2015 and a foreign debt share of only 15.6 percent to GDP” show that our “fiscal position is shaped for resiliency and sustainability.” Other positive factors “make our debt structure built to withstand global turbulence.”
Our country’s average economic growth over the past six years of around 6.2 percent shows the strongest performance since 1978. Good governance has also been a factor in ensuring the acceleration of delivery of basic social services over that same period of time: education spending increased by 125 percent, social services by 166 percent, health by 336 percent, and infrastructure by 360 percent.
Forecasts by the International Monetary Fund and Asian Development Bank are for the Philippine economy to remain healthy with GDP growth at 6 percent this year and 6.2 percent in 2017. The Neda’s full-year target for the country in 2016 is an optimistic 6.8 to 7.8 percent.
These are encouraging figures, and we anticipate that even with the coming changes this year, the Philippine economy will continue to expand, as it will with the proven formula for economic success of good governance and structural reforms.
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Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.