PH economy posts 6.6% growth in Q4 2017

THE National Economic and Development Authority reported that the Philippines posted a 6.6 percent (%) growth rate in the last quarter of 2017.

"This stable performance brings our full-year growth in 2017 to 6.7 percent—a strong finish that keeps our position as one of the fastest-growing economies in Asia after China’s 6.9% and Vietnam’s 6.8%," said Ernesto M. Pernia, Socioeconomic Planning Secretary during a press briefing Tuesday at the Astoria Plaza, Ortigas Center in Metro Manila.

Pernia pointed out that the Philippines' economic performance in 2017, which is a post election year, remains higher as compared to the post election years of 2005 and 2011.

In election year 2004 the economy's growth rate was a 6.7% but in 2005 it dropped to 4.8%. The drop was much steeper for election year 2010 and post election year 2011. The economy's growth rate in 2010 was at 7.6% but then dropped to 3.7% in 2011.

During election year 2016, the economy posted a growth rate of 6.9% and wend down to 6.7% in 2017.

"You can see that our decline is really very moderate at 0.2 percent of 1 percentage point. To me, this is a good performance, given the fact that it is already normal for post-election years to witness a decline in economic growth," Pernia said.

He said growth in the fourth quarter was backed by robust growth of 14.3% in public spending — that was really the main driver, public spending—which was an increase from 4.5% in the previous year.

"This is very much in line with the government’s commitment to timely delivery of public services and social protection programs, including assistance to victims of typhoons as well as in the Marawi conflict, public scholarship programs, and health expenditure programs," Pernia said.

He said the external demand improved with growth in exports of goods bouncing back to 20.2% in the fourth quarter from 17.2% in the third quarter.

"This offset the services exports sector’s slowdown of 12.6% from 19.9% in the previous quarter," Pernia said.

He pointed out that the slowdown in the services sector was due to "miscellaneous services, which includes the BPO industry—business processing outsourcing."

"We can take this as an indication that the current market profile of the BPO sector is ripe to move into higher value added services," Pernia said.

He also reported that the domestic demand growth also strengthened to 7.3% in the fourth quarter from 6.4% in the third quarter.

"Fixed investments growth remained positive and accelerated to 9.3% with growth in durable equipment improving further to more than 12.1%. This is indicative of businesses’ continued confidence in the long-term prospects of the Philippine economy," Pernia said.

Neda also recorded stronger public construction spending at 25.1% that offset the 2.9% contraction in private construction.

"This keeps the overall construction growth in positive territory, which is a boost in line with our Build Build Build program," Pernia said.

On the supply side, Neda recorded improvements in utilities and mining.

"Growth in services was supported by transport and communications, trade, and public administration, defense, and social security," Pernia said.

He also noted that the agriculture sector has recovered from the decline of -1.3 percent in the fourth quarter of 2016 as it posted a 2.4 percent growth in fourth quarter in the same period in 2017.

"With these developments, we move forward in 2018 with even stronger determination to accelerate growth to hit our target range of 7% to 8%.

We are, of course, coming from the steady growth streak of 6.9% growth for full-year 2016 and 6.7% growth in 2017. Both are well within our growth range targets," Pernia said.

He said the Build Build Build program will continue to spur the economic performance of the country as it opens more opportunities in investments, employment, and connectivity.

"At the core of the program are 75 high-impact Infrastructure Flagship Projects that represent the major capital undertakings of the government, which will implemented within the medium-term. This includes transport, energy, irrigation and water supply projects to promote growth centers outside the urban-industrial region centered around Metro Manila," Pernia said.

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