Building on a strong 2nd-quarter 7% GDP

The good news is that the Philippine economy, as measured by Gross Domestic Product (GDP), grew by 7 percent in the second quarter of this year – April to June. Not so laudatory is the observation that this has not been inclusive growth, that the statistical gain has not been felt by most Filipinos who have seen no improvement in their daily lives.

The 7 percent quarterly rise – compared to only 5.9 percent in the same period last year – is largely attributed to the massive spending in the last presidential election campaign. As the election spending is over and we are back to the usual pace of economic activity, we can expect the rise in GDP in the rest of this year to return to normal.

But for now, we can take pride in knowing that in this second quarter of the year, the Philippines appeared to have the fastest growth among the countries of Asia, together with India which also had 7 percent. China had 6.7 percent; Vietnam, 5.6 percent; Indonesia, 5.2 percent; Malaysia, 4 percent; and Thailand, 3.5 percent. By way of further comparison, the world’s leading economies had even more modest second-quarter GDP growths – the United Kingdom, 2.2 percent; Singapore, 2.1 percent; the United States, 1.2 percent; and Japan, 0.2 percent.

The Philippines’ 7 percent GDP covered the last three months of the Aquino administration. “The previous administration gave us a strong and stable economy that we can build on further by maintaining the sound macro-economic, fiscal, and monetary policies already in place,” new Socio-Economic Planning Secretary Ernesto M. Pernia said.

The challenge now is for the new Duterte administration to build on this second-quarter growth and to make the growth inclusive. Pernia said the new administration has already pinpointed one area that must be developed – the farming and fishing sector, which has about 10 million workers and their families.

“Knowing that the majority of poor Filipinos rely on this sector for their livelihood, the administration will prioritize agricultural development,” Pernia said. Agriculture had been sorely ignored by the last administration, suffering five consecutive quarters of decline. In the last quarter of April-to-June, while the overall GDP was up 7 percent, agriculture declined 2.1 percent. A great deal of work is thus awaited from the new Secretary of Agriculture Emmanuel Pinol.

There will be other sectors of the economy that will be receiving considerable attention from the administration’s new economic managers. It may now be concentrating on fighting crime and drugs, in keeping with the principal campaign promise of President Duterte, but with along with peace and order, security and stability, the people will be looking forward to real economic growth that reaches down to touch them in their daily lives. – Manila Bulletin, August 24, 2016