The Philippine economy grew 6.7% in 2017, slower than the 6.9% growth recorded in 2016 but enough to keep the country’s position as one of the fastest growing economies in Asia after China’s 6.9% and Vietnam’s 6.8%.
Citing data from the Philippine Statistics Authority (PSA), Socioeconomic Planning Secretary Ernesto Pernia said the full-year gross domestic product for 2017 was the result of a 6.6% growth in the fourth quarter of last year, and following the revision of the third-quarter GDP growth recently to 7% from the previously reported 6.9%.
Pernia said the 6.7% GDP growth is “very moderate at 0.2% of 1 percentage point” compared to the “deep dive” in GDP growth during the post-election years such as in 2005 and 2011.
“This is a good performance, given…it is already normal for post-election years to witness a decline in economic growth.”
Growth in the fourth quarter of 2017 was backed by the 14.3% expansion in public spending, an increase from 4.5% in the same quarter in 2016.
On the expenditure side, 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% in the quarter from 19.9% in the previous quarter.
A key “factor to this decline was 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,” he explained.
Domestic demand growth also strengthened to 7.3% in the fourth quarter from 6.4%. Fixed investments growth remained positive and accelerated to 9.3% with growth in durable equipment improving further to 12.1%. This, Pernia said, indicates businesses’ continued confidence in the long-term prospects of the Philippine economy.
Public construction spending rose 25.1%, offsetting the 2.9% clip in private construction.
On the supply side, improvements were recorded in utilities and mining. Growth in services was supported by transport and communications, trade, public administration, defense, and social security.
Agriculture recorded 2.4% growth in the fourth quarter, having recovered from the decline of -1.3% in the same period last year.
“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.
