Palace blames inflation for missed 2018 economic growth target

Malacañang on Thursday blamed inflation for the slowdown in economic growth  even as it expressed confidence that the Philippines will be able to meet its target in 2019.

Economic output, as measured by the gross domestic product (GDP), settled at 6.2 percent last year, which was below the government’s downward-revised target range of 6.5 to 6.9 percent. The 2018 GDP growth was also the slowest in three years since the 5.8 percent growth in 2015.

Presidential spokesperson Salvador Panelo said spikes in consumer prices dampened economic growth.

Inflation peaked at 6.7 percent in September and October 2018, the fastest in over nine years since soaring to 7.2 percent in February 2009, before it went down to 5.1 percent last December.

"Ang tingin ko kung walang inflation rate na nagka-problema mas mataas pa tayo sa target," Panelo said at a news conference.

Panelo admitted that they were "disappointed" by the missed growth target "but does not mean you feel you are such a failure."

"You work harder para you can reach your target," he said, adding the economic managers are confident that the government's 7 percent-8 percent target for 2019, an election year, will be realized.

Moving forward, Socioeconomic Planning Secretary Ernesto Pernia said the government must push for the passage of several reforms—the Public Services Act, the Foreign Investment Negative List, and the Rice Tariffication Act—to address policy uncertainties so that the 2019 economic growth will be achieved.

“To remedy this, the government needs to first address the policy uncertainties, increase macro-competitiveness by enhancing the efficiency of transport, communications, and the overall logistics network,” he said.

Pernia also called for "integration of industries between small and medium enterprises on one hand, and large establishments on the other."