DAVAO Region is seen to significantly contribute to the growth of Philippine economy for the second quarter (April to June), which is pegged at seven percent.
National Economic and Development Authority (Neda)-Davao director Maria Lourdes Lim said in an interview at the sidelines of the Q2 2016 Report on the Philippine Economy Press Conference at the SMX Convention Center, SM Lanang Premier, Davao City that with the robust business climate in the region, Davao will indeed play a crucial part in the country’s growing economy.
However, Lim has yet to validate the claim as the breakdown per region contribution in the country’s average gross domestic product (GDP) growth data will be made available later this year.
In 2015, Davao Region contributed some four percent of the total GDP of the country.
“We are expecting this to grow drastically with the strong interest of investments poured in the region. But the trend really is, the region, on an average is growing in economic performance,” she said.
7% GDP growth in Q2
Socioeconomic Planning Secretary Ernesto Pernia presented on Thursday that the seven-percent growth in the Q2 of 2016 is an upbeat start for the current administration.
The growth is driven by the Services sector particularly Trade, Real Estate and other Services.
April to June period growth was faster than the 5.9 percent in the same period last year as well as 6.8 percent in the first quarter.
National Statistician Lisa Grace Bersales said that the average gross domestic product (GDP) growth in the first half (Jan. to June) was at 6.9 percent.
Pernia emphasized that on the demand side, investments had the highest contribution of 5.7 percentage points to GDP growth.
Also, investments in durable equipment registered an increase of 42.8 percent and private sector investments in construction, which grew to 8.3 percent from 8.1 percent in the first quarter.
This growth, he said, was driven by stronger business confidence, low interest rates, and strong performance of the construction sector.
The Rodrigo Duterte administration targets the GDP to grow by a “conservative” six to seven percent in 2016.
“The economy will need to grow by at least 5.1 percent in the second half of the year to attain at least the low-end of the growth target,” Pernia said.
He also added that while it is normal to see a slowdown in the second semester during election years, the situation now reflected a different direction following “the smooth transition of power and assurance of macroeconomic policy consistency and continuity by the new Administration.”
This, according to him, will keep business and consumer confidence strong, essential to meet the full year target.
Inclusive growth
The economic managers of the Duterte administration vowed to bring development and growth outside Metro Manila.
“The campaign of the peace and order will help by itself lure and boost investors outside Manila especially in Mindanao,” Pernia said.
Recognizing the previous administration efforts in maintaining for the strong and stable economy, Pernia said that the challenge for them now is how to trickle down the growth to the grassroots, in a bid to enable more people contribute to, and benefit from it.
With this, the economic team also vowed to “improve the competitiveness of the markets and business climate to take advantage of the new surge of investments in the region and look at the sectors and geographic areas that have been lagging behind and determine how to improve their access to these opportunities.” (ASP)