Philippines to be ASEAN Fastest Growing Economy in 2016

The Philippine economy grew faster than expected at 6.9 percent in the first quarter from the same period a year ago, its highest quarterly growth in almost three years, officials said Thursday as the government prepares to hand over leadership to the incoming administration.

Economic Planning Secretary Emmanuel Esguerra said the robust performance shows the economy’s continuing high-growth trajectory and increases the likelihood of achieving the official full-year gross domestic product growth target of 6.8 to 7.8 percent.

“The next administration and indeed, the next generation, inherits a rapidly growing, vibrant Philippines cushioned by robust foundations built over six years,” said Finance Secretary Cesar Purisima.

The economy grew an average of 6.2 percent over the last six years. The previous quarter growth was 6.5 percent.

Brash-talking Davao city Mayor Rodrigo Duterte won the May 9 presidential race by a landslide based on an unofficial count. The new administration takes office on June 30.

Esguerra said it is important not to miss the current wave of foreign investments in the region, where the Philippines is now a destination of choice. Demonstrating the maturity of its democratic institutions, policy consistency and agreement on a long-term vision are important for sustained business confidence, he added.

First quarter growth was driven by the services sector, which grew 7.9 percent and industry, which recorded its highest growth in five consecutive quarters at 8.7 percent, officials said. Investments also surged, with fixed capital posting 25.5 percent growth. Agriculture contracted 4.4 percent, the fourth consecutive quarter of decline.

The quarter’s growth was faster than 11 selected Asian economies. The Philippines was ahead of  China which GDP grew by 6.7%, Vietnam by 5.5%, and Indonesia by 4.9%. For the first time in 27 years, the Philippines has grown faster than China.

Finance Secretary Cesar V. Purisima, for his part, said the next administration would inherit a rapidly growing, vibrant Philippines cushioned by robust foundations built over six years. “No longer the sick man of Asia, the Philippines emerges more confident and more optimistic than ever, demanding to be governed by even higher standards of governance than before,” he said.

The growth, however, did not help the outgoing Aquino administration in the May 9 elections, as its presidential candidate lost by a wide margin, an indication that growth marginally reduced the number of people living in poverty. to the poor, among other reasons.

Economists welcomed the Duterte administration’s eight-point economic agenda, under which the incoming leadership plans to accelerate infrastructure spending, address land administration and management, attract more foreign direct investment flows, expand and improve the conditional cash transfer program, shore up government revenue collection, make tax administration more progressive, modernize the agriculture sector, as well as strengthen the basic education system.

Source: Associated Press/AFP