The Philippine economy expanded by 5.8 percent in 2015—the slowest annual gross domestic product (GDP) growth rate since 2011’s 3.7 percent and below the government’s target, which the country’s chief economist nonetheless described as “respectable” and still among the fastest among its Asian peers.
For Economic Planning Secretary Arsenio M. Balisacan, who will leave the state planning agency National Economic and Development Authority (Neda) to chair the newly formed Philippine Competition Commission starting next month, the next administration could sustain the economic expansion under President Aquino if it would address lingering constraints to growth.
In a press conference yesterday, National Statistician Lisa Grace S. Bersales said GDP grew by 6.3 percent in the fourth quarter of last year, the fastest quarterly rate in 2015, although slower than the 6.6 percent posted in the same period of 2014.
The fourth-quarter economic expansion brought the full-year growth to 5.8 percent, lower than the official government target of 7-8 percent as well as the “realistic” 6-percent growth earlier projected by economic managers.
“Though this is lower than what we targeted for the year, this growth is respectable given the difficult external environment, the onset of El Niño and the challenges in government spending in the first semester,” Balisacan said.
The 2015 figure was also lower than 2014’s 6.1 percent, 2013’s 7.1 percent and 2012’s 6.8 percent. But Balisacan pointed out that the average of 6.2-percent GDP growth posted in the six years of the Aquino administration was the highest since the late 1970s, adding that only India, China and Vietnam exceeded the Philippines’ economic performance among major developing Asian countries last year.
Bersales said the services sector steered the economy last year as it grew 6.7 percent to exceed the 5.9-percent expansion posted in 2014. Growth in the agriculture and industry sectors, on the other hand, slowed to 1.6 percent and 0.2 percent, respectively, from 7.9 percent and 6 percent last 2014.
“While exports growth has been lackluster at 5.5 percent compared to last year’s 11.3 percent, exports in services have been very strong given the BPO [business process outsourcing] sector’s robust performance. There is still a lot of room for expansion in the BPO sector toward higher value-added services—and this will require a more diversified set of skills and services and can stimulate economic activities in more sectors,” Balisacan said.
Balisacan also noted that last year’s growth “was driven by a much stronger domestic demand” coming from higher government spending on public goods and services, increase in public and private investments, and robust household consumption.
According to Balisacan, “we can expect higher growth for 2016 as the global economy also picks up,” but only through “sound fundamentals and ongoing structural changes in the economy that make it more resilient to shocks.”