Silver lining: PH still better than Indonesia, Thailand despite slower growth – NEDA
MANILA — The Philippine economy further cemented its position as one of Asia’s top performers after accelerating 6.2 percent last year despite high inflation and a slowdown in agriculture.
In a press briefing Thursday, Socioeconomic Planning Secretary Ernesto Pernia considered last year’s economic performance as a “firm finish” as the country trailed behind India, Vietnam and China; while overtaking Indonesia and Thailand in the first three quarters.
Pernia said the economy remained stable after growing 6.1 percent in the fourth quarter of 2018 from 6.5 percent the previous year, enabling the Philippines to sustain its growth of more than 6 percent for a seventh year in a row.
The country’s gross domestic product (GDP) expanded slightly higher at 6.7 percent in 2017.
“Inflation rate is a deflator, a high rate always reduces your economic growth rate… Inflation hits the economy in two ways — it tempers spending both household spending and government spending,” he said.
Inflation peaked to a record high of 6.7 percent in September and October, with the brunt felt the most on food prices due to supply issues.
It declined to a seven-month low of 5.1 percent in December amid government efforts towards further reining in the prices of commodities.
Pernia, also Director General of the National Economic and Development Authority, likewise cited the slump in the country’s agricultural performance, pulled down by the decline in palay production, sugar cane and cassava after several typhoons hit Luzon.
With last year’s high economic performance, Pernia was optimistic the 7 to 8-percent growth target this year is achievable.
“A 7 percent to 8 percent has been an aspiration and I think no administration has achieved that kind of growth over time. Maybe for one to two years, that growth numbers have been achieved but not in a sustained passion because of the external environment and the certain things that are beyond our control,” he said.
Pernia said the robust performance of industry in the fourth quarter, growing at 6.9 percent, fueled by the surge in construction as it grew by the double-digit to record its fastest pace since the first quarter of 2013.
“That’s a good indicator of the continuing driving force of the ‘Build, Build, Build’ program,” he said.
The Philippine Statistics Authority (PSA) said services followed which grew by 6.3 percent, and agriculture by 1.7 percent in October to December.
Pernia said manufacturing grew by 3.2 percent, a deceleration from 7.9 percent during the same period in 2017, due to weak business confidence and policy uncertainties, coupled with sluggish export demand amid a global economic slowdown.
“Consider inflationary trends, that’s one uncertainty. And then the restrictions on foreign investments,” he added. (PNA)