MANILA — The economy grew 6.4 percent in the first quarter this year on the back of strong performance of agriculture and manufacturing sectors, making the Philippines still one of fastest-growing among major Asian emerging economies.
The Philippines ranked second to China’s growth of 6.9 percent, but overtook Vietnam and Indonesia which surged 5.1 percent, and Thailand by 3.3 percent.
The January to March quarter gross domestic product (GDP) growth, however, was below forecasts of 7 percent during the period; and 6.5 percent to 7.5-percent target set by government for the year.
Socioeconomic Planning Secretary Ernesto Pernia attributed the slower GDP to base effects, noting last year’s growth was high due to election spending.
“First quarter last year was benefiting from election spending. This year, there will be no election so there is no election spending,” he explained in a press briefing.
Pernia noted that last quarter’s growth was still higher than GDP in the first quarters of 2011 and 2014, which expanded only 4.6 percent and 5.6 percent, respectively. These were the years following election years of 2010 and 2013.
Despite slightly higher pace of economic growth, Pernia, who is also the National Economic and Development Authority (NEDA) director general, said there was no need to revise this year’s GDP target.
“I don’t think so, no (need to revise). The DBCC (Development Budget Coordination Committee) target is 6.5 percent to 7.5 percent, whereas we are 6.4 percent. It’s likely that this maybe revised upward later on as what happened to the 6.8 percent growth for 2016 and revised upward to 6.9 percent,” he added.
The Philippine Statistics Authority (PSA) reported that services had the fastest growth of 6.8 percent, albeit lower than last year’s 7.5 percent. The sector had the highest contribution to economic growth in the first quarter at 3.8 percent.
Industry also declined to 6.1 percent from 9.3 percent recorded in the first quarter last year, as a boost in manufacturing was tempered by the slowdown in construction and utilities and decline in mining and quarrying production.
Agriculture made a great comeback with 4.9-percent growth rate after several quarters of negative growth or decline.
Industry and agriculture contributed 2.1 percent and 0.5 percent, respectively, to GDP growth in the first quarter.
“Moving forward, the domestic economy is poised to maintain its growth momentum with the recovery of external trade and private sector’s steadfast optimism,” added Pernia.