PHL's Q2 GDP slows down to 6.0%

Philippine economic growth decelerated during in the second-quarter of the year, the Philippine Statistics Authority reported Thursday.

It was partly due to policy decision made by the Duterte administration that, according to Socioeconomic Planning Secretary Ernesto Pernia, were supposed to support “sustainable and resilient development.”

In a press conference in Pasig City, National Statistician Lisa Grace Bersales said the economy grew by 6.0 percent, compared with 6.7 percent a year earlier.

Bersales noted the services sector grew by 6.8 percent, followed by the industry’s 6.3 percent, and agriculture’s 0.2 percent.

During the same press conference, Pernia noted the second quarter GDP growth placed the Philippines third in terms of the fastest growing economies in Asia, but that it could have done better.

“Although this growth still puts the Philippines as one of the best-performing economies in Asia, just after Vietnam at 6.8 percent growth and China at 6.7 percent growth, and ahead of Indonesia’s 5.3 percent, this growth rate is less than what we had hoped for,” he said.

‘Policy decisions’

“To be fair and put things in proper context, the slowdown is partly due to policy decisions undertaken that are expected to promote sustainable and resilient development,” Pernia noted.

“We are referring to the temporary closure of Boracay Island from April to October 2018, which partly made a dent in the economy with growth in exports of services slowing to 9.6 percent in the second quarter from 16.4 percent in first quarter,” he said.

President Rodrigo Duterte approved in April a recommendation to close the island resort for six months and make way for an environmental rehabilitation starting.

Pernia earlier said the six-month closure of the island would cost the economy as much as P1.96 billion.

“We are also referring to regulations in the mining sector–the closure of several mining pits and the excise tax on non-metallic and metallic minerals–so that the mining and quarrying sector showed a lackluster performance. It is down by 10.9 percent,” Pernia noted on Thursday..

“Moreover, the stricter enforcement of regulations on aquaculture producers at Laguna Lake resulted in the drop of freshwater fish catch,” he said.

In the six months to June, the economy grew by 6.3 percent in the first semester, slower than the government target range of 7.0 to 8.0 percent.

“This implies that the Philippine economy would have to expand by at least 7.7 percent in the second semester to attain the low end of our target of 7 to 8 percent for 2018,” said Pernia.

The Philippines could still meet the low-end of the target range, with the entry of a third player in the telecommunications industry and the reopening of the Boracay.

“In the services sector, the immediate facilitation of the possible entry of a third player in the telecommunications industry will enhance the efficiency of communications, and support the growth of small business, particularly retail trade,” Pernia noted.

“Further, the resumption of tourism activities in Boracay Island by October gives us good reason to be bullish about prospects for tourism and other service sectors in the fourth quarter,” he said.

Environment Secretary Roy Cimatu noted that Boracay will officially reopen on October 26. —LBG/VDS, GMA News