Economy stays healthy a year after Duterte
A London-based research firm said the Philippine economy was facing persistent challenges even as it painted a rosy picture after a year of the Duterte administration.
“The Duterte administration’s latest economic dashboard is flashing a healthy green,” Rajiv Biswas, IHS Markit chief economist for the Asia-Pacific region, said in a research note.
Biswas noted that growth in the first quarter of 2017 as measured by the gross domestic product (GDP) was 6.4 percent year-on-year while exports surged 18.5 percent year-on-year.
He added that as of end-May, inflation was pegged at 3.1 percent, which was near the midpoint of monetary authorities’ target range.
“After one year under the Duterte administration, the Philippines economy is continuing to perform strongly, with GDP growth forecast by IHS Markit to be 6.4 percent in 2017 and 6.3 percent in 2018, maintaining the high-growth trajectory that has been recorded since 2012,” Biswas said.
But he added that the law-and-order situation, due to the high crime rates in major cities as well as the insurgency in Mindanao, continued to be a key challenge facing the administration.
“Another major medium-term challenge is the high share of the population still living in poverty, with President Duterte having given a high priority to social expenditure to try to lower poverty rates during his remaining term in office,” Biswas said.
“Among the key challenges for the Duterte administration over the next five years will be to make the Philippines a more attractive hub for manufacturing investment in order to make the manufacturing sector an important source of export growth as well as generating more manufacturing sector jobs,” he said.
The economist said further economic liberalization to encourage greater foreign investment into the services sector and infrastructure development should be important priorities for Malacañang.
“Another important industrial development strategy should be to diversify the hubs of regional economic growth away from Manila and encourage more dynamic industrial development in other major cities,” Biswas said.
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