PHL economy grows 6.8% in Q1 on gov’t spending

The economy grew by 6.8 percent in the first quarter of the year, fueled by government spending, the Philippine Statistics Authority (PSA) announced Thursday.

The Philippine was the second fastest growing economy in Asia, Socioeconomic Planning Secretary Ernesto Pernia noted in a press conference in Pasig City on Thursday.

“The Philippines remains one of the best performing economies in the region, next to Vietnam’s 7.4 percent growth, same as China, and higher than Indonesia’s 5.1 percent,” Pernia said.

Data released by the PSA showed government spending rose by 13.6 percent during the period from 0.1 percent the first three months of 20171.

“Among the major economic industries, industry recorded the fastest growth,” National Statistician Lisa Grace Bersales said in the same press conference.

Industry grew by 7.9 percent, by services by 7.0 percent, and agriculture by 1.5 percent.

Economic growth picked up from 6.4 percent in the first quarter of last year, and the upwardly-adjusted 6.5 percent in the fourth quarter of 2017.

The first quarter GDP is also the fastest since the upwardly-adjusted 7.0 percent in the third quarter of 2017 and is in line with market expectations of accelerated growth in January to March.

Pernia noted, however, that economic growth should have reached the upper-range of the government’s target of 7 to 8 percent if not for the spikes in inflation during the quarter.

“If not for the Q1 2017 to Q1 2018 rate of increase in inflation, real GDP growth could have been closer to the high-end of our growth target of 7-8 percent,” he said.

Headline inflation accelerated to 3.8 percent in the first quarter of the year, faster than the 3.2 percent in the first three months of 2017, and the 3.0 percent in the fourth quarter of 2017.

“So, inflation is the spoiler, that is why we really need to focus on inflation especially because it is the number one concern expressed by Filipinos in surveys, by SWS or Pulse Asia,” Pernia noted.

He said the government should intervene and strengthen the purchasing power of the public.

"Reducing food inflation is necessary to increase people’s purchasing power,” he said. —VDS, GMA News