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The Philippines may beat the government’s own growth target for the year as official data released this week showed that the economy continued to be one of the fastest growing in Asia.
The Philippine economy, measured in terms of gross domestic product (GDP), grew by 7.5 percent in the second quarter from a year ago on the back of rising local investments, strong household consumption, and higher government spending, the National Statistical Coordination Board (NSCB) reported Thursday.
The Philippines is in “a much better position than other emerging economies in terms of ability to withstand problems in the global economy,” Socioeconomic Planning Secretary Arsenio Balisacan Thursday said in a briefing.
Because of the economy’s favorable performance in the second quarter, the country now has a greater chance of exceeding the government’s official full-year growth target of 6 to 7 percent, Balisacan explained.
Malacañang officials took heart from the economic report that detailed the country’s performance in the last quarter.
In a statement, Palace officials yesterday said that, despite the challenging climate for emerging economies, the Philippines showed remarkable resilience.
“The heady growth rate, which has not dipped below 6 percent since the first quarter of 2012, hews closely to the GDP growth targets set by the Philippine Development Plan,” according to the Palace statement.
“Throughout the Aquino administration, we have persistently proven that good governance does result in good economics. As such, we will continue to push toward establishing an environment that underscores accountability, transparency, and that which encourages further partnerships between the public and private sectors to meet our developmental goals,” the officials said.
Last quarter marked the fourth consecutive time that the Philippines registered growth of at least 7 percent. The growth rate is considered significant enough to make a difference in the government’s poverty reduction effort.
The economy’s performance in the second quarter of the year brought the average growth rate in the first semester to 7.6 percent, even after a revision was made in the first quarter GDP expansion to 7.7 percent from the previous 7.8 percent.
The economy grew by 6.3 percent in the second quarter of 2012.
According to latest official data, poverty incidence in the country stood at 27.9 percent in the first semester of 2012—still one of the highest in Asia. This was just slightly lower than the 28.6 percent of the population considered poor in 2009, even though the economy maintained a healthy growth track from 2009 to 2012.
“We need to continue attracting investments, and we need to sustain strong growth over the long term,” Balisacan said.
The Philippines’ growth rate for the second quarter matched that of China during the same period, beating Indonesia’s 5.8 percent, Vietnam’s 5 percent, Malaysia’s 4.3 percent, Singapore’s 3.8 percent and Thailand’s 2.8 percent.
It was also faster than Japan’s 2.6 percent, Taiwan’s 2.5 percent and South Korea’s 2.3 percent, he added.
The economy posted a healthy growth record despite the contraction in exports. From January to June, Philippine export revenues dropped by 4.4 percent to $25.58 billion from $26.76 billion, due to the slow recovery of major markets like the United States, the euro zone, and Japan.
“If not for the decline in exports, our growth rate could have been even higher,” Balisacan said.
Balisacan also pointed to the increasing contribution of the industry sector. The sector posted the fastest year-on-year growth rate of 10.3 percent, helped up by higher investments in manufacturing.
In the past, the services sector usually posted the highest growth rate. In the second quarter, the services sector, which includes business process outsourcing (BPO) firms, grew by 7.4 percent.
“Business confidence in the economy has been improving, and this is translating into higher investments in manufacturing,” said Balisacan, who also serves as director general of the National Economic and Development Authority.